These monthly updates are my way of documenting that process: how the portfolio performed and where it currently stands. My long-term goal is to build a simple portfolio with only a few assets and a few rebalances per year that can outperform the total crypto market, Bitcoin, and the S&P 500 over 10+ years, while being more resilient during crypto bear markets. By publishing everything openly, I hope this becomes useful both for investors entering crypto and for experienced investors looking at different ways to structure their exposure.

If you know someone who might find this experiment useful, feel free to share it with them.

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My Portfolio Performance

Performance Since My First Update

August gave the portfolio some much-needed help. When I published my previous portfolio update on July 25, my return since the first public update was -17.3%. At the time of writing on August 30, that loss has narrowed to -6.8%, largely because Bitcoin moved quickly from around $62,000 to above $80,000.

The comparison with Bitcoin is more interesting to me than the recovery itself. BTC is currently 10.6% below its price when I started publishing these updates, compared with -26.5% a month ago. The total crypto market has followed a similar path. It is also down 10.6% since my first post, after being down 25.7% last month. So far, my portfolio remains ahead of both benchmarks, although all three are still negative.

The S&P 500 is a different story. Helped primarily by the continued AI boom, it is now 11.5% higher than it was when I started tracking the portfolio publicly. That leaves my portfolio underperforming the S&P 500 by 18.3%. This gap is still significant, but it has improved from 24.3% last month. More importantly, eight months tells me relatively little about whether a strategy designed around a 10+ year horizon works. There is plenty of time for that comparison to change in either direction.

Drawdown Remains Lower Than Crypto

The portfolio is still underwater since I started showing it publicly at the end of 2025. I hope that changes before the end of this year, although 2026 has not exactly provided an easy environment for crypto assets.

What matters more to me is how the portfolio behaved while conditions were bad. Its maximum drawdown this year was around 23%, reached briefly in early July. A 23% drawdown is obviously not small, but at roughly the same point Bitcoin was down around 34%, while the total crypto market had fallen about 32%. The current drawdown has now recovered to -6.8%, again smaller than the 10.6% decline in both Bitcoin and the total crypto market.

Downside resilience is also part of what I am trying to achieve with this strategy. Outperforming crypto during good periods is great, but limiting losses when the market turns against me matters just as much.

Portfolio Turnover

There has also been very little activity behind these numbers. My last portfolio rebalance was on April 23, 2026, and that remains the only rebalance I have made this year. 50% of the portfolio was reallocated during that rebalance, meaning my portfolio turnover so far in 2026 is 0.5.

My Current Positions

My portfolio remains concentrated in Bitcoin and tokenized gold. The allocation reflects how I currently see the balance between crypto upside and the risks coming from the broader macro environment.

I explained the reasoning behind these positions, the allocation itself, and the broader strategy in more detail in last week’s post on my portfolio strategy. If you want to understand why I am holding these two assets rather than a broader basket of crypto assets, that is the better place to start:

Financial Conditions Are Loose, but Inflation Matters

Financial conditions in the US remain loose, which is generally supportive for risk assets (including crypto). At the same time, economic growth remains solid, while inflation is still too high for the Fed to feel comfortable. Warsh said last week that a rate hike next month is possible, which is something I think investors should at least take seriously when thinking about the current regime.

The situation around the Strait of Hormuz adds another layer of uncertainty. The crisis has not been resolved, even though there has been some progress toward addressing it. As long as that remains the case, there is still the possibility of another inflationary shock.

I went much deeper into inflation, the US labor market, economic growth, and my interpretation of the current regime in my latest monthly macro analysis. My view has not changed materially since then, so I will avoid repeating the whole argument here.

p.s. If you want to follow how that macro picture develops, subscribe to Mladen Talks Crypto. I publish a dedicated macro update each month.

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Where I Go From Here

Thanks for reading. I am a retail crypto investor who has been publishing his portfolio and strategy publicly since December 2025. The purpose is not to pretend that I have found a portfolio that always works. I want to document how I invest in crypto, explain the reasoning behind my decisions, and see whether this approach can outperform the broader crypto market over the long run.

Next week, I will most likely write about one of two topics. The first is the advantages retail investors have over institutional investors, which I think are often underestimated. The second is the growing debate inside banking between adopting stablecoins and developing institutional forms of tokenized money, and what that could mean for crypto investors.

If either sounds interesting, or you simply want to follow these transparent monthly portfolio updates, consider subscribing to Mladen Talks Crypto.

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I am also curious about your view on my current positioning. Would you rather hold another crypto asset right now instead of gold or Bitcoin?

If so, which one, and why?

Write your reasoning in the comments. I would like to see how other investors are thinking about the current conditions.

See you soon. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

In one of my recent posts, I covered my macro analysis for this month and how I think it affects the crypto market. You can find the full post here:

📊 My latest monthly macro analysis

For those who don’t have time to read the full 10-minute article, here’s the short version:

We currently live in very interesting times, shaped by several contradictory forces. That is also true in financial markets because it is unusual to see an economy that appears strong and stable on the surface while demonstrating very different patterns underneath. On the strong economy side, we are witnessing the Magnificent 7 making new ATHs week after week. At the same time, the US labor market is showing signs of weakness, while consumer sentiment is at historical lows. Additionally, the war in the Middle East is still ongoing and solutions seem increasingly difficult to find.

Last week, I also wrote about the current situation in the US bond market and why I don’t find recent developments particularly encouraging for either fiscal or monetary policy, both of which have a major influence on the crypto market:

💵 My post on the US bond market

Furthermore if we look at financial conditions in the US, we can see that they have been loosening since 2022 and are now at their loosest levels in almost five years. So, quite loose and for quite a long time. Combined with inflation that is still not under control, this suggests that a market cooling isn’t as impossible as many people seem to think. It also means that the current state of the economy offers no guarantee that growth can continue in the same way as in the last couple of years.

Current Allocation Strategy

Macro analysis wouldn’t make much sense if I couldn’t translate it into a capital management strategy and ultimately into my portfolio allocation. But since I invest primarily in on-chain assets, I need to add one disclaimer before continuing with this section.

Although I’m interested in several different asset classes, investing through the crypto market currently gives me access to a relatively limited number of them. I would love to have the opportunity to invest in stocks or eventually bonds through blockchain infrastructure (And when I say stocks, I mean actual stocks, not the stock derivatives that can currently be found on-chain). For now, that isn’t really possible in the way I would want it to be.

Because of that, I currently focus on the following asset classes and try to get the most out of them:

• Tokenized gold

• BTC

• Alts (primarily ETH and SOL, and their ecosystems)

• Cash (stablecoins)

When crypto eventually makes it possible to invest properly in ETFs, energy, bonds and other asset classes, that will be a game changer and something that would probably expand my current investment universe. For now, however, we’re not there yet.

Anyway, back to the most important part of this post.

At the moment, my portfolio contains only two asset classes: tokenized gold and BTC. The allocation is close to 50/50, although BTC currently has a slightly larger share because I changed my allocation to gold/BTC (50/50) at the end of April, and BTC has performed a little better since then. That was also my first and, so far, only allocation change this year.

Next week I’ll publish my latest portfolio performance, so if you’re interested in seeing the actual results, consider subscribing.

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And now, let’s move on to why gold and Bitcoin are my favorite assets in the current environment.

✅ Why I’m Holding Gold

I would start my thesis for holding gold with a fairly simple observation: current market conditions are very favorable for this precious metal (as well as for commodities in general).

Inflation that is still not under control, combined with the problems developing in the US bond market, is almost everything a gold bug could ask for. Add the fact that central banks around the world have been buying gold at historically high levels, and the thesis becomes even stronger.

From a technical analysis perspective, the picture also looks good. Gold is currently trading around 18% below its ATHand has shown very strong momentum over the past month, breaking above resistance around both the 50-day and 200-day moving averages.

✅ Why I’m Holding Bitcoin

Bitcoin is trading at around $80K at the time of writing, which puts it roughly 35% below its ATH.

At the same time, financial conditions remain loose, allowing inflationary pressure to persist across markets, and BTC as a risk asset can potentially benefit significantly from that environment.

It is also worth looking at how consistently Bitcoin has held above $60K. I’m honestly not sure what we would need to experience for the price to break meaningfully below that level and continue falling from there. We would probably be talking about a crisis of somewhat larger proportions.

Although this may sound terribly unprofessional (😂), BTC currently looks to me as though it has more upside than downside potential from here. So why not LFG? 🚀

❌ Why I’m Still Avoiding Altcoins

I would probably be happiest if I could honestly tell myself and all of you that altcoin season is approaching and that I can simply “ape in” into alts that would probably generate much larger returns than BTC or gold.

Unfortunately, my current analysis doesn’t support making the same decision today.

Liquidity isn’t expanding nearly as quickly as I would like to see, the economy isn’t standing on particularly healthy foundations, and financial conditions have already been loose for too long for me to assume that capital will simply continue moving toward highly risky asset classes.

I’m afraid that people calling for an imminent altcoin season similar to 2021 either have an incentive to promote that narrative for their own benefit or don’t really understand the underlying market conditions and are just repeating what they hear elsewhere.

My channel offers a different perspective, and the analysis is free. If you have friends who aren’t seeing much diversity of opinion on this topic, feel free to send them this post. I’d genuinely like to hear their feedback and why they see the situation differently.

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❌ Why I’m Not Sitting in Cash

Why not cash is a fair question, especially considering how cautious I sound about the current state of the economy.

However, while I still believe the economy is standing on somewhat shaky ground, the fact remains that financial conditions are inflationary. Developments in the bond market and the Middle East are also adding further inflationary pressure.

Under those circumstances, I simply don’t think cash offers me a better setup than gold or Bitcoin, especially with both trading way below their ATH.

What Would Make Me Change This Allocation?

The reason I currently feel quite comfortable holding a combination of Bitcoin and gold is that this allocation covers the scenarios I consider most realistic.

With gold, I’m hedging against inflation that is still not under control, as well as the possibility of a sovereign debt crisis or a larger crisis in the bond market. With BTC, I hope to get at least some exposure to monetary debasement, while also being exposed to the potential upside in risk assets as long as financial conditions remain loose.

This combination currently gives me enough peace of mind that I don’t feel the need to do anything, which is usually a good thing. However, for me to change my current allocation, I would need to see one of two scenarios.

The first would be a meaningful tightening of financial conditions. In such a case, I would increase my cash position and wait for conditions to stabilize. I consider this scenario quite possible because tightening can have several causes and doesn’t necessarily need to begin with a Fed decision. In previous cycles, market stress itself has often done that job first (think of the Covid crisis in March 2020).

The second scenario is completely different from the first. It’s one where economic growth clearly outpaces inflation, while financial conditions continue to support risk assets. Such a development would make me increasingly attracted to altcoins. At the moment, however, I honestly struggle to see how we get to that setup without some form of market cooling first.

However, none of us knows exactly what will happen next. That’s why I regularly follow the data and intend to change my allocation only when the underlying conditions actually change.

What Comes Next

So, do you agree with my current allocation?

If you’re thinking along similar lines, I’d appreciate it if you shared this post with someone who might find it useful. And if you disagree, even better. Let me know in the comments what you would hold instead of BTC and gold at the moment, and why.

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This weekend, I’ll try to publish my monthly portfolio performance update, so consider subscribing if you’d like to see how this strategy actually performs when the market puts it to the test.

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Thanks for reading, and see you soon. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

In this post, I’ll try to explain what the Treasury actually wants to do, why high long-term yields have become a problem, where I see the weakness in this approach, and finally, how I think this development could affect Bitcoin, the broader crypto market, and gold.

Welcome to my new post.

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What Bessent Is Actually Trying to Do

Scott Bessent, the US Treasury Secretary, announced an increase in the size of Treasury buyback operations involving long-term government bonds. Put simply, one such operation, which takes place once or twice a week across different types of securities, means that the Treasury enters the secondary market and buys back a certain amount of already existing Treasury securities from investors.

It was also stated that the planned size of these operations will now increase to $4 billion or more, compared with approximately $2 billion per operation until now.

The Treasury will finance this process through the issuance of short-term debt, mainly through T-bills. For the purpose of this article, we can simplify the idea like this: issue more short-term debt and use that capital to buy back existing long-term debt.

Here I want to make one useful distinction between the Treasury and the Fed, especially for retail investors. The Treasury manages government finances, issues debt, and conducts fiscal policy, while the Federal Reserve conducts monetary policy and determines conditions such as the benchmark interest rate. In simple terms, the Treasury decides how much debt to issue and how to manage that debt, while the Fed has a major influence on how cheap or expensive that financing ultimately becomes.

I would also add that a T-bill is simply a short name for a US Treasury bill, which is short-term government debt with a maturity of up to one year.

Why High Treasury Yields Have Become a Problem

To understand why the Treasury wants to intervene in this part of the market at all, we first need to look at the broader fiscal picture.

US national debt now exceeds $40T, which is roughly 125% of GDP. At the same time, the yield on the 30-year Treasury is trading around 5.25–5.30%, and this week it reached approximately 5.34%, its highest level since 2007.

The problem with high yields is that over time they make government financing more expensive. When existing debt matures and needs to be refinanced, new debt is issued at interest rates that reflect current market conditions. The longer yields stay elevated, the larger the share of US debt that gradually rolls over into more expensive financing.

The average interest rate on marketable Treasury debt is currently around 3.44%, but interest costs are already becoming a serious fiscal burden. Net interest expense has exceeded $1T per year, while the projection for fiscal year 2026 is around $1.04T, or approximately 3.3% of GDP. For comparison, the cost of servicing US debt is already higher than US defense spending, which, as we all know, is hardly small.

As another comparison, Switzerland ended 2025 with federal net debt of around CHF 140.1B, or just 16.1% of GDP.

Seen from that perspective, it becomes much easier to understand why a few dozen basis points in the Treasury market are no longer a small issue for the US government.

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The Problem This Strategy Doesn't Solve

There is one problem (or probably several) that this kind of debt restructuring does not solve and may even create.

When the Treasury increases T-bill issuance, the supply of short-term government debt rises. As long as there is enough demand, that does not necessarily create a serious problem. But if supply starts growing faster than demand, the price of those short-term securities has to adjust lower, which means higher yields and more expensive short-term financing for the same amount of newly issued T-bills.

(If anyone wants a more detailed explanation of how this works, feel free to ask in the comments below or send me a DM.)

There is also another issue that I think is somewhat more important.

Greater reliance on short-term debt means that this debt has to be refinanced much more frequently. A 30-year bond locks in financing conditions for a very long period. A T-bill matures within months, after which the Treasury has to return to the market and refinance that debt again.

That makes fiscal costs much more sensitive to short-term interest rates.

For example, if the Fed is forced to raise rates more aggressively in the future because of inflation, a large portion of short-term debt would have to be refinanced relatively quickly at higher rates. In that way, the Treasury increases the dependence of government finances on future monetary policy.

In simpler terms: the problem has not disappeared. It has only changed form.

Why Bitcoin, Crypto and Gold Reacted

This move by the Treasury does not solve the real problem that has pushed the US sovereign debt market close to a crisis, or perhaps already into one. That problem is the combination of a large fiscal deficit and the continued irresponsible growth of national debt.

Instead, I think this move sends investors another signal that the Treasury is not prepared to confront that problem in the way that would actually be required.

No matter how much the Treasury tries to improve the functioning of the bond market through financial engineering, sustainably lower long-term yields eventually require something much more fundamental: investors need to believe that future fiscal and monetary policy will keep both debt and inflation under control.

So far, I don’t see much evidence that the underlying fiscal problem will be resolved anytime soon.

If anything, greater reliance on short-term debt makes the Treasury even more sensitive to future Fed decisions. And while the Fed formally makes decisions independently from the Treasury, and its mandate is not to manage government borrowing costs, my subjective view is that it is difficult to believe the fiscal consequences of monetary policy can remain completely outside the equation.

If investors conclude that policymakers will try to control financing costs without meaningfully reducing fiscal deficits, then it is not surprising that markets may already be starting to price a scenario associated with monetary debasement and easier financial conditions over the long run.

In that kind of environment, part of the capital in the system can naturally start looking for alternatives to traditional fiat assets. I think that helps explain at least part of the recent reaction in gold, Bitcoin, and crypto.

Why I'm Still Cautious About Altcoins

As positive as the recent move in Bitcoin and other crypto assets may look, I would be very careful about concluding that this is the beginning of a new broad risk-on wave.

The reason is that this move is not coming from a particularly healthy macro environment.

If the market is genuinely beginning to price financial repression and easier financial conditions because US debt is becoming increasingly difficult to service, then in my opinion that creates a very clean argument for gold.

It could also be positive for Bitcoin, although I am still not completely sure how BTC would behave if this regime continues. For broad risk assets, and especially altcoins, my conclusion is much less positive.

The reason for my view on altcoins is that today’s starting point is very different from the period after the Covid crisis and the last major altcoin season.

Back then, the economy had already gone through a very sharp cooling period, inflation was low, and then an enormous amount of new liquidity entered the financial system. That combination was extremely supportive for speculative assets and eventually helped create a major bull market.

Today, the starting point is different.

The market has already been in some form of hybrid expansion for several years, inflation is still not fully under control, and additional inflationary risks, including geopolitical problems in the Middle East, have not disappeared. Liquidity is expanding, but nowhere near the pace we saw after the Covid crisis.

For a similar liquidity explosion to happen today, the Fed and Treasury would have to accept a much larger inflationary risk in an economy carrying a significantly heavier debt burden than it did five years ago.

For now, I don’t see the conditions that would justify such a scenario, nor do I see enough risk appetite to expect a sustainable altcoin season. In my opinion, the market probably needs a more meaningful cooling phase first.

That’s why I would treat the current crypto rally with some caution.

On the other hand, the gold bull case looks fundamentally much cleaner to me than almost anything else at the moment. Gold has historically performed well during periods of fiscal and monetary uncertainty, while central banks have already been increasing their gold purchases for years.

For Bitcoin, I leave more room for different outcomes.

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What Comes Next

Thank you for reading this post.

This is just one of the developments I am currently following as I try to understand how the broader macro regime is changing and what those changes mean for my crypto portfolio.

My next post will be published soon and will focus specifically on my crypto portfolio allocation. I will explain how I translate these, along with other macro developments I follow, into concrete decisions about where I currently keep my capital.

If you found this article useful, feel free to share it, leave a like, and subscribe for free so you get notified when the next one is published.

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See you soon. 🍻

In this article, I’ll share how I currently assess the US economy and financial conditions, as well as how I use that information when making investment decisions. The goal is to better understand the market regime we are currently operating in, because only then can we reasonably evaluate which asset classes within the digital asset market are most likely to outperform.

The framework I use isn’t particularly complex, nor does it require tracking dozens of economic indicators. In fact, I don’t think that kind of analysis is necessary for most retail investors. The reason is simple: unlike large institutional investors and hedge funds, retail investors have several valuable structural advantages. We manage much smaller amounts of capital, which allows us to adjust our portfolios much more quickly when conditions change. We also tend to have a higher tolerance for risk and, perhaps most importantly, we don’t have to explain every short-term move to clients or shareholders. We don’t need to catch every swing in Bitcoin or react to every daily price fluctuation. In my opinion, it’s enough to recognize when the market regime is changing, because that’s when the biggest opportunities for outperformance usually emerge.

Before we begin, I’d also like to explain why these analyses focus almost exclusively on data from the United States. The short answer is simple: because the US is still by far the most important and influential economy in the world. I’m not sure the crypto market has ever meaningfully reacted to an economic event that didn’t originate in the United States in one way or another. If I had to give a longer answer, I’d point out that Federal Reserve policy, the US bond market and the overall health of the American economy continue to shape global financial markets. The largest institutional investors, the biggest share of the development ecosystem and the majority of capital flowing through the digital asset industry are still overwhelmingly concentrated in the United States. That’s why I believe understanding the US macro environment is the best starting point for understanding the crypto market as a whole.

Over the coming weeks, I plan to write a dedicated article explaining why I believe the United States remains the center of the crypto industry today. If topics like these sound interesting to you, don’t forget to subscribe so you don’t miss it.

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How Healthy Is the US Economy?

The first important step in understanding the current state of the US economy is to understand three things: economic growth, inflation and the strength of the labour market. Fortunately, it doesn’t take dozens of indicators to get a reasonably good picture. I focus primarily on real GDP over the last four quarters (including the current one), Core PCE inflation(the inflation measure the Federal Reserve pays the closest attention to when making interest rate decisions), and several labour market indicators, because looking at the labour market from multiple angles gives me a much better understanding than relying on the unemployment rate alone.

Looking at the past four quarters, one thing is clear: the US economy is still growing. Real GDP has continued expanding quarter after quarter, and on the surface there doesn’t seem to be anything particularly concerning about that. But once I compare that growth with inflation, the more interesting story begins.

Over the past four quarters, real GDP has grown by approximately 0.52% (Q4/25→Q1/26), then 0.37% (Q1/26→Q2/26), while the current estimate for this quarter stands at roughly 1.45% (Q2→Q3), according to the GDPNow model.

During the same period, Core PCE increased by 1.13% (Q4/25→Q1/26), followed by 0.72% between Q1 and Q2. We are still waiting for enough data to estimate its pace during the current quarter (July data will be published at the end of August), but even without it I personally don’t believe inflation has stopped or meaningfully started moving lower. The reason is fairly simple: the conditions that influence inflation haven’t become deflationary. I’ll explain why I think that in the next section.

Inflation itself shouldn’t be the problem. Some level of inflation is completely normal in a growing economy. However, what matters much more is the relationship between inflation and economic growth. If inflation continues growing faster than the real economy over an extended period, consumers gradually lose purchasing power and economic growth becomes less healthy than headline GDP numbers alone might suggest. Which is exactly what I observe every day, just by looking at people around me and across the world struggling with the rising cost of living. Isn’t that true?

On the other hand, the labour market is also less convincing than it first appears to be. Although the unemployment rate has remained relatively low in recent months, I don’t think it tells the whole story. One reason is the labour force participation rate, which shows that the share of working-age Americans who are actively participating in the labour market has been shrinking over the last couple of months. In July, that figure fell to 61.4%, one of the lowest levels seen in several decades. When people stop looking for work, they are no longer counted as unemployed. As a result, the unemployment rate can paint a more optimistic picture than the labour market actually deserves.

At the same time, Nonfarm Payrolls have been trending lower for quite some time, and over the past ten months there have already been four months with net job losses. We haven’t seen that happen for years (excluding the extraordinary circumstances during Covid), and I certainly don’t think artificial intelligence is the only explanation. Wage growth has also continued to slow, which further reinforces my view that today’s labour market is no longer as strong as we think (or hope) it is.

Taken together, these indicators provide a reasonably good picture of the current state of the economy. For me, however, they still aren’t enough to decide which digital assets I should own. Understanding where the economy stands is only one part of the process. I also want to understand where it is likely heading and why. That’s why I analyse financial conditions separately from economic growth before combining both into a single view of the current market regime.

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Are Financial Conditions Inflationary or Deflationary?

To get a clearer picture of today’s financial conditions, I focus primarily on three indicators: the Fed Funds Rate, overall US liquidity, and the Adjusted National Financial Conditions Index (ANFCI), published weekly by the Chicago Fed.

I’ll start with interest rates. The Fed Funds Rate currently stands at around 3.63% and has remained at roughly the same level since December 2025. The broader trend, which has been in place since August 2024, still points to a gradual easing of monetary policy. However, over the past several months it has become clear that interest rates have essentially stopped moving.

Every month, investors seem to debate whether the Fed will raise rates or cut them. Personally, I try to ignore those discussions as much as possible. My job isn’t to analyse what the Fed might do. My job is to analyse what it has actually done so far. And at the moment, all I see is... nothing. The Fed hasn’t made a meaningful move in either direction. But standing still also has important consequences.

The second indicator I follow is total US liquidity, which I calculate as:

After reaching a local low at the end of 2023, liquidity has been recovering gradually and currently stands at around $29T. That’s only about $650B higher than it was at the peak of the previous crypto bull market in late 2021. The fact that liquidity is only modestly above its previous peak tells me two things:

The third indicator I consider particularly important is the (Adjusted) National Financial Conditions Index (ANFCI). This index combines more than one hundred indicators covering credit conditions, leverage and financial market risk. What makes it especially useful is that it doesn’t focus on just one part of the financial system but attempts to quantify how loose or restrictive financial conditions are as a whole.

For more than two years now, ANFCI has pointed to gradually loosening financial conditions, while credit markets continue to function without any meaningful signs of stress. At the same time, market leverage is somewhat above average, but still well below levels historically associated with market crises.

When I put all of these indicators together, my conclusion is fairly straightforward.

Current financial conditions don’t look deflationary to me. If anything, they continue supporting economic expansion while also maintaining an environment in which inflation has room to remain more persistent than the Fed would probably like or admit. Of course, that doesn’t mean this regime will last indefinitely. An unexpected financial crisis, a major geopolitical event or a decisive shift in monetary policy could change the picture relatively quickly. But until something like that actually happens, the data still looks much more like an inflationary status quo than the beginning of a deflationary environment.

My Current Market Regime

When I combine the state of the economy with today’s financial conditions, my conclusion is that the market still operates within a risk-on regime. That being said, not every risk-on environment looks and behaves the same, so I need to elaborate on this a bit further.

The US economy continues to expand, and financial conditions remain relatively loose. At the same time, inflation is still running faster than I would like to see, while large fiscal deficits and a growing public debt leave policymakers with increasingly limited room to maneuver. For that reason, I wouldn’t describe today’s environment as a healthy risk-on regime. Instead, I see it as a late-stage risk-on environment.

That may sound like a subtle distinction, but I think it’s an important one.

Different phases of the business cycle have historically rewarded different asset classes. That’s why, in my opinion, simply asking whether the market is risk-on or risk-off isn’t enough. The more important question is what kind of risk-on environment we’re in, because the answer has a direct impact on how I think about portfolio positioning.

And that’s exactly the question I’ll discuss in next week’s article (→ please subscribe!).

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Looking Ahead

Thank you for reading another one of my monthly macro updates.

This article offers a glimpse into an important part of the process I go through every month before making investment decisions. Understanding the economy and financial conditions is only the starting point. The next step is deciding which asset classes offer the most attractive balance between potential return and risk under the current market regime.

That’s why next week’s article will be a natural continuation of this one. If today’s macro environment really looks the way I’ve described it, the obvious next question becomes:

In the next post, I’ll explain how I translate my macro conclusions into actual investment decisions.

For all of you who don’t know me, I’m a retail investor focused on digital assets, and this Substack is a transparent record of my investment journey. My goal over the coming years is to outperform both Bitcoin and the broader crypto market by identifying changes in the macro regime and adapting my portfolio when conditions genuinely change.

If this way of thinking resonates with you, I’d be happy to have you as a subscriber. The newsletter is completely free, and every new reader means a lot to me as I continue documenting this journey.

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See you next week. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

For quite some time, I have wanted to write about a delicate topic, one that still feels almost taboo in many corners of finance. I think part of the reason is relatively simple: most investors still do not fully understand the complexity behind it, or what exactly this strange market might eventually become.

That topic is memecoins and their ecosystem. Or perhaps this post is less about what memecoins are today, and more about what they have introduced that could eventually shape at least one part of the financial system of the future.

What makes them even more interesting to me is the timing. We are entering an AI era in which creating almost anything is becoming easier and cheaper. And if creating things becomes less scarce, the general assumption is that the ability to distribute them and capture people's attention becomes more valuable. Somehow, while most serious investors were busy making fun of memecoins, this strange little corner of crypto was already experimenting with both.

Before going any further, I should admit that I was one of the original memecoin haters. For a long time, I looked down on the entire emerging ecosystem. When it started expanding roughly two years ago, crypto was still largely in a bear market, and my reaction was basically: Oh no, another stupid blockchain use case.

I watched traders around me ride wave after wave of new memecoin launches, sometimes making serious money and sometimes simply making money, while knowing perfectly well that this ecosystem was not solving any major civilizational problem. To me, it looked mostly like a new casino built for the same old lunatics.

But after spending enough time living and breathing digital assets, at some point I became the proud owner of a few memecoins myself. We will say this happened because of friends, because that makes me sound slightly more serious both to myself and to you, my brilliant Substack peers.

And just like that, I found myself inside a digital community that had previously been completely foreign to me. Through constant interaction on social media, people advertised, sang, shouted, complained and occasionally stood on their heads, all around one shared interest: turning their project into a symbol of investment success and, ideally, turning themselves into millionaires and rock stars among their contemporaries.

As time passed, however, I slowly started to see something beyond the speculation. I began to understand some of the advantages created by these tokens. I am deliberately calling them tokens rather than memecoins here, because I suspect that ten years from now, on-chain assets built around similar mechanisms will no longer necessarily be called “memecoins.”

The purpose of this article is to explain how I arrived at the conclusion, that the mechanisms pioneered by memecoins will materially change certain areas of the financial system.

And to new readers of my newsletter, welcome. If you enjoy topics that absolutely nobody needs in ordinary life, such as taking crypto investing seriously, you are in the right place. 🤓

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So, what exactly are memecoins bringing to our otherwise rather monotonous world of investing?

Why Distribution Matters More in the AI Era

In the AI era, when almost anything can be learned, understood or increasingly even built with the help of technology, I think distribution becomes one of the most important skills. The scarce resource may no longer be the ability to create a product or write software, as it was for much of the previous technological era. Instead, the advantage increasingly belongs to those who have access to channels through which they can bring a product or service to users and eventually monetize it.

So, what exactly do I mean by distribution?

Distribution is simply the process through which a product, service, or similar, moves from the person who creates it to the people who might use or buy it. Several factors influence this process, but the one I care about most is the channel through which you reach potential users and how easily you can access your target audience.

Since I am a doctor, I will use an example I know from personal experience. With the arrival of AI, helping patients has become easier in many ways. Questions that previously required much more time to research can now be explored quickly, information is easier to find, and even patients sometimes arrive better prepared. This can improve the service doctors provide, but it also puts much more knowledge into our hands. Occasionally, it even makes me wonder whether being a doctor is really that difficult anymore. With enough AI assistance, almost everyone can feel like one for a few minutes.

What remains difficult, however, is completing medical school and years of training, obtaining a degree and receiving a license that legally allows you to treat patients. Someone outside medicine might understand a particular diagnosis better than an individual doctor, but that does not give them the same access to patients. The doctor has the distribution channel. In this example, better distribution can exist even when the underlying knowledge or “product” is not necessarily better.

Internet technology already removed many of the old barriers between producers and consumers. I think of this as Distribution 2.0. Today, a large number of products and services can be sold directly through Amazon, Shopify or a personal website, with a fraction of the cost and effort that distribution required before the internet.

The emergence of memecoins as a use case for blockchain technology introduced another possible layer. For the first time, we started seeing large digital communities in which the community itself becomes one of the main distributors of the asset or project. I think of this model as Distribution 3.0.

What makes Distribution 3.0 different is the incentive structure. Blockchain allows a community to have a direct financial incentive to participate in distribution. The people spreading the product, idea or brand can also have ownership exposure to its success. Distribution therefore becomes part of the ownership model itself, while the traditional cost of reaching new users can potentially fall substantially.

Memecoins, in my opinion, were the first large-scale experiment that turned this theory into something observable in practice. They are obviously an imperfect experiment, but they give us an early picture of what this model could look like beyond memecoins themselves.

Of course, not every project benefits from being distributed by a community. In some cases, there is little reason to introduce such an incentive at all. But there are areas where I think the potential benefit is much larger, particularly where success already depends heavily on building an active community. Open-source software is one example. Ideological movements could be another, as could social networks, gaming ecosystems and the monetization of intangible assets such as brands.

All of these models depend, to different degrees, on communities being able to distribute their ideas, products or services to an increasing number of people. Adding financial ownership to that process could create a new way to scale distribution and potentially raise capital faster than was previously possible.

I am only going to touch the surface of these models in this article rather than analyze each one separately. If this topic interests you, subscribe to the newsletter or send me a DM. I would be happy to go deeper into individual examples in future posts. 🍻

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Attention Becomes Scarce in the AI Era

In the digital world, producing content is no longer the main problem. Every day, millions of videos, articles, posts and other forms of content compete for the same audience, and AI is making production even easier. The amount of available content can continue to increase almost without limit, but the number of hours people have to consume it remains roughly the same. In that environment, attention becomes increasingly scarce relative to the amount of material competing for it.

Until now, businesses have relied on different strategies to capture that attention. They pay for advertising at public events, on television or across social media. They produce organic content, optimize for internet searches through SEO, and use many other more or less creative methods to reach potential customers. Most of these approaches require specialists, while their effectiveness often depends on how much capital a company is willing to spend.

The problem with this model is that the audience remains mostly passive. A satisfied customer may recommend a good product or service to a friend, but there is usually little direct incentive to do so. The customer consumes the product, while the company continues paying for distribution and attention.

Blockchain technology, and more specifically the memecoin ecosystem, has shown that this relationship can work differently. If the community owns part of the project through a token, its members have a financial incentive to participate in marketing and distribution themselves. Depending on the purpose of the project, this could substantially reduce the cost of acquiring attention while potentially producing similar or even better results.

There is another interesting dynamic here. Successful distribution can bring new members into the community, which can increase the value of the network and strengthen the incentive of existing members to continue contributing. In the right conditions, this creates a positive feedback loop similar to what we describe through Metcalfe’s Law, where a network becomes more valuable as the number of participants grows.

One example that might help explain what the writer is trying to say here could be a fictional story about a Substack community built around a shared passion for value investing:

Imagine that this community decides to create its own token. Let’s call it a memecoin even though it does not necessarily have to be called that, because hey, there is already some comedy in value investors holding a memecoin. 😅

The value of that token increases as more people join the community. Existing members write high-quality articles, organize good events and have thoughtful discussions about investing. That attracts more investors who want to become part of the community. To become a member, every new investor needs to own a certain amount of the token.

As the community grows and the token appreciates in price, they decide to use a certain percentage of that value to invest in things that matter to the community: more events, better research, buying Berkshire Hathaway shares, and so on. In other words, the growth of the community helps finance the things that make the community more valuable in the first place, which can then attract even more people.

And who knows, perhaps some of them even get rich along the way. Probably the ones who decide to put a little less capital into value stocks and a little more into that viral token. Haha just kidding (I guess). 🤔

Memecoins Are the First Draft of Something Bigger

Most investors, especially serious investors, still see memecoins as speculative, highly volatile tokens with no intrinsic value. Anyone who has spent the last two years inside the crypto industry would probably find it difficult to accuse them of being completely wrong. Much of what we have seen so far supports exactly that interpretation.

But I think judging what memecoins could enable in the future based only on what they represent today is a mistake for anyone trying to think long term. The current form of a technology does not necessarily tell us much about where its underlying mechanisms will eventually be useful.

Beyond introducing new distribution channels and surprisingly effective ways of attracting attention, memecoins have created something else that I find much more interesting. They have shown that ideas can spread among people and attract capital through a process that looks very different from what we have historically been used to.

Until now, the path of an idea has generally looked something like this:

Idea → product or service → users → revenue / capital

An idea first had to become a company, product or organization before it could create meaningful economic value. It usually needed to build something, find users and demonstrate that a market existed. Capital could obviously enter earlier through traditional funding, but access to that capital was limited and generally depended on established intermediaries and networks.

Blockchain introduced a different possibility, and the memecoin ecosystem has probably taken that possibility further than anyone else so far:

Idea → community → capital → product or service

This does not mean that every idea can suddenly attract the funding it wants. The history of memecoins suggests almost the opposite. The vast majority will probably disappear, as we have already seen with countless projects. But for the first time, an idea does not necessarily have to wait until it becomes a company before the market can assign value to it. If enough people gather around the same narrative, they can launch a token at close to zero initial cost and effectively attempt to finance that narrative from the beginning. Whether the market decides that it is worth anything is, of course, a completely different question.

This creates an infrastructure in which ideas are no longer limited to company formation or lengthy capital-raising processes before they can begin building an economic network around themselves. In my opinion, this may be the most important innovation that memecoins have introduced so far. What we are seeing today may simply be the first, rather primitive version of that model.

Closing Words

Despite everything I have written here, I remain loyal to my existing strategy for investing in digital assets. I am not chasing 100x returns. My objective is to outperform the broader crypto market, Bitcoin and the S&P 500 over time, which I have written about in my latest portfolio update post. But learning about innovative uses of blockchain forces me to think more carefully and gives me a broader understanding of what is actually developing inside this industry.

I should also disclose that I’m invested (with a relatively small amount—less than 1% of my portfolio) in one memecoin on Solana, mostly because I like the community and the story behind it. The token is $UFD, or Unicorn Fart Dust. Its founder, Basement Ron, is a self-described boomer, gold bug and content creator who originally launched Unicorn Fart Dust to demonstrate how ridiculous crypto was and that basically anyone could create a token.

Gen Z, being Gen Z, took the joke seriously.

They organized around it and collectively pushed the token to almost a $200 million market cap. Basement Ron was apparently blown away by what happened and eventually became one of the more transparent and recognizable founders within this niche of crypto. The $UFD community, although the project itself remains relatively small, is still full of extremely vocal members who, almost two years later, continue supporting their “beans,” as the community calls UFD tokens.

From time to time, I also collect on-chain data from memecoin projects and try to understand whether there is a measurable formula behind the success of tokens whose value depends heavily on the strength of their networks. I am genuinely interested in understanding the psychology and mechanics of distribution and attention, because I think both will become increasingly relevant in the digital and AI economy.

So far, some of the parameters that appear interesting are:

• how often a token is mentioned organically on social media;

• How many coins are held among the top 10 wallets;

• how many new investors appear among the top wallets (d/w/m);

• how strong the “diamond hands” of existing investors remain during bear markets.

It will take much more time and data before I can say with any confidence whether one of these parameters, or some combination of them, actually contains alpha. If you find this kind of analysis interesting, let me know in the comments and I may dedicate a future article to it.

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Nothing in this post should be interpreted as advice to buy memecoins. In fact, I do not think they are a good investment for most people. For me, being part of the $UFD community while trying to understand how a project without conventional intrinsic value can survive and grow during a period of major digital change is genuinely interesting, and I plan to continue doing it. I do not count on making significant money from that position. I understand the risk and the low probability of that outcome.

Thank you to everyone who made it to the end.

See you in the next episode next week! 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

Gold reached a local peak in October 1999 before declining by roughly 15% into March 2000, just as the dot-com bubble was beginning to unravel. At that moment, it would have been difficult to imagine that the following decade would become one of the strongest periods in gold's modern history. By May 2001, gold had already recovered to its March 2000 level. More importantly, by July 2007, while the S&P 500 had only just managed to reclaim the highs it first reached in 2000, gold had appreciated by almost 150% from its March 2000 price. Since then, both assets have continued to benefit from an environment shaped by abundant liquidity and expanding money supply. Even so, the difference remains striking. Gold has returned roughly 1,300% since 2000, while the S&P 500 has delivered approximately 400% over the same period (and upwards of approx. 750% if you include reinvested dividends).

That does not automatically mean gold is the better investment today. Markets move through different regimes, and the conditions that rewarded one asset in the past may not persist indefinitely. Still, I don’t believe gold has reached its final peak in the current cycle. To explain why I think that, we first need to understand what drove its strongest historical bull market.

So welcome to this article. Using historical evidence from the 1970s, when gold appreciated even more than it has over the past twenty-six years, I’ll explain why I still consider gold to be one of the most attractive assets to own in the current market environment, and why it has earned a place alongside Bitcoin in my own portfolio.

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Why Gold Outperformed Between 1970 and 1980

Gold rose from $35 per ounce in 1970 to approximately $850 per ounce in January 1980, representing a gain of roughly 2,300% in a decade. Very few major asset classes have experienced such an extraordinary move over such a short period. It is tempting to look for a single explanation, but I don’t think one exists. Instead, several powerful forces developed simultaneously, reinforcing one another and creating an environment in which gold became increasingly attractive.

When Gold Became a Free Market Asset

The collapse of the Bretton Woods system was the single most important structural event behind gold’s extraordinary performance during the 1970s. Before 1971, the international monetary system worked very differently from today’s. Under Bretton Woods, the US dollar was convertible into gold at a fixed price of $35 per ounce, and foreign central banks could exchange dollars for physical gold whenever they wanted. As a result, gold was not truly a freely traded asset. Its price was effectively fixed by the monetary system itself.

That changed dramatically in August 1971, when President Richard Nixon suspended the dollar’s convertibility into gold, an event commonly known as the closing of the gold window. Overnight, the dollar became a purely fiat currency, and gold was finally allowed to trade freely in the open market. For the first time in decades, investors rather than governments had to determine what one ounce of gold was actually worth.

I think it is difficult to overstate how important that transition was. Investors suddenly faced a monetary system without an external anchor, and nobody knew with confidence how fiat currencies would behave over the long term. Gold quickly became the natural alternative for those looking to preserve purchasing power outside the monetary system. Demand increased not simply because inflation was already rising, but because confidence in the existing framework had fundamentally changed. The rules had been rewritten, and markets needed time to discover what a freely traded monetary asset should be worth.

Oil Shocks Changed the Inflation Regime

While the end of Bretton Woods fundamentally changed the monetary system, the oil crises of the 1970s transformed inflation from a concern into a persistent global problem.

The first major shock came in 1973 following the Yom Kippur War, a conflict in which Israel fought a coalition led by Egypt and Syria. In response to Western support for Israel, OPEC reduced oil production and imposed an oil embargo on several countries. The result was dramatic. Oil prices roughly quadrupled within a relatively short period, pushing transportation, manufacturing and energy costs sharply higher across the global economy.

Only a few years later, another major disruption followed. The Iranian Revolution in 1979 significantly reduced Iranian oil exports, tightening global supply once again. Oil prices surged for a second time, reinforcing inflationary pressures that had never fully disappeared after the first crisis. Unlike temporary price spikes driven by local shortages, these shocks affected almost every sector of the economy because energy is a fundamental input into nearly all production processes.

Confidence in the Federal Reserve Faded

As inflation became more persistent, another problem emerged. Investors increasingly questioned whether the Federal Reserve was willing to keep monetary policy restrictive long enough to restore price stability. This one was about confidence in the policymakers responsible for bringing it under control.

For years, the pattern had been frustratingly familiar. Inflation would accelerate, the Federal Reserve would tighten monetary policy, economic growth would begin slowing, political pressure would mount, and policy would eventually become more accommodative again. Inflation repeatedly returned before it had truly been defeated. After watching this cycle play out several times, investors stopped believing that the Federal Reserve would ultimately tolerate the economic pain required to restore price stability.

By 1980, US CPI inflation had climbed above 14%, reinforcing the perception that inflation was becoming embedded rather than temporary. In that environment, gold naturally became more attractive. It has historically been viewed not only as protection against inflation itself, but also against the possibility that policymakers lose control of the purchasing power of fiat currencies.

Fiscal Policy Added More Pressure

Monetary policy was only part of the story. Fiscal policy also contributed to growing concerns about the long-term purchasing power of the US dollar.

Throughout the late 1960s and into the 1970s, the United States found itself financing several expensive priorities at the same time. Rather than choosing between fighting the Vietnam War or expanding the welfare state, the government effectively pursued both. Spending on military operations continued alongside the introduction of major social programmes such as Medicare and Medicaid in 1965, as well as expanded education initiatives, anti-poverty programmes and housing support. Each of these policies may have had its own political justification, but together they significantly increased government spending.

The result was a series of persistent budget deficits. By today’s standards they were relatively modest, yet they marked an important shift. Investors began paying closer attention to whether governments were willing to finance spending through sustained borrowing rather than difficult fiscal choices. Even if deficits were not exceptionally large, they contributed to broader concerns about the long-term credibility of the monetary system, particularly in a decade already characterised by high inflation and declining confidence in policymakers.

That said, I think the fiscal story of the 1970s is a bit overstated compared to now, since these two periods are far from identical. Back then, federal debt relative to GDP generally remained between 30% and 40% throughout most of the decade. Compare that with today’s debt burden, which exceeds 120% of GDP, and the difference becomes immediately apparent. Fiscal concerns certainly mattered during the 1970s, but they were nowhere near the scale we are witnessing today.

Geopolitics Reinforced the Trend

The 1970s were also marked by an unusually large number of geopolitical shocks, many of which carried direct economic consequences.

The Vietnam War continued into the early part of the decade, placing sustained pressure on government spending while contributing to broader fiscal concerns. At the same time, Cold War tensions between the United States and the Soviet Union remained elevated, forcing both countries to maintain substantial defence budgets throughout the period.

The Middle East also became an increasingly important source of instability. As mentioned above, both the Yom Kippur War and the Iranian Revolution disrupted global oil exports, contributing to major oil shocks and reinforcing inflationary pressures that had never fully subsided.

Toward the end of the decade, the Soviet invasion of Afghanistan in 1979 further intensified geopolitical uncertainty. Although the invasion itself had only a limited direct effect on gold demand, it added to the broader perception that the global environment was becoming less stable and increasingly unpredictable.

Speculation Marked the Final Stage

The final stage of the gold bull market looked very different from the beginning.

Initially, investors were responding to structural changes in the monetary system, rising inflation and growing macroeconomic uncertainty. But after years of strong performance, another force began driving prices higher. Investors increasingly bought gold simply because its price kept rising. Momentum replaced careful analysis, and expectations became increasingly detached from the underlying fundamentals.

By late 1979, the market had become highly speculative. The final surge into January 1980 displayed many of the characteristics commonly associated with financial bubbles, with rapidly rising prices attracting even more buyers who feared missing further gains. Gold eventually reached approximately $850 per ounce in January 1980, setting a nominal record that would stand for nearly twenty-eight years.

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Why Gold Underperformed After 1980

Looking only at the first part of the story, one could easily conclude that gold should have continued outperforming throughout the following decades. After all, inflation had been high, geopolitical tensions remained elevated, and governments certainly didn’t stop borrowing money overnight. Yet the market changed direction almost immediately after January 1980. Gold entered one of the longest periods of underperformance in its modern history, while financial assets such as equities and bonds gradually became far more attractive.

In my opinion, understanding why that happened comes down to one individual more than anyone else: Paul Volcker.

Volcker became Chairman of the Federal Reserve in August 1979 with one objective above all others: restoring price stability. Inflation had reached levels that were no longer viewed as temporary or manageable, and confidence in the Federal Reserve had been severely damaged after years of policy reversals. Rather than trying to engineer a soft landing, Volcker accepted that bringing inflation under control would almost certainly require significant economic pain.

The Federal Reserve aggressively tightened monetary policy. By December 1980, the Federal Funds Rate had climbed above 19%, the highest level in modern American history. Those numbers alone were remarkable, but I don’t think they fully explain why Volcker became such an important figure in financial history.

The real achievement was that he restored the Federal Reserve’s credibility.

For years before Volcker, markets had observed roughly the same sequence of events. Inflation would rise, the Federal Reserve would respond by raising interest rates, economic activity would begin slowing, political pressure would intensify, and eventually policy would become more accommodative before inflation had actually been defeated. That pattern repeated itself under several Federal Reserve Chairmen, including William McChesney Martin, Arthur Burns and G. William Miller. Investors gradually stopped believing that restrictive monetary policy would be maintained for as long as necessary.

Volcker understood that changing interest rates alone would not solve this problem. He needed to change what people believed and refused to repeat the same pattern.

He accepted a deep recession as the price of restoring price stability. The consequences were severe. US unemployment eventually climbed above 10%, industrial production contracted sharply and entire sectors of the economy came under intense pressure. Farmers famously drove their tractors to the Federal Reserve in protest, while homebuilders mailed pieces of lumber to the Fed to demonstrate that mortgage rates had become so high that new homes were no longer being built. Political criticism came from virtually every direction, but none of it changed the Federal Reserve’s course.

Over time, markets began adjusting their expectations. Once the credibility of the monetary system was gradually restored, demand for an alternative monetary asset naturally became less compelling. The structural conditions that had supported gold were beginning to change, even though many of the underlying challenges had not disappeared overnight.

The effects extended well beyond the gold market. High US interest rates attracted capital from around the world, increasing demand for the US dollar and contributing to a stronger currency. Since gold is priced in dollars, a stronger dollar has historically created additional headwinds for gold prices. At the same time, several central banks became net sellers of gold over the following decades, adding further downward pressure on the market.

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How Today’s Environment Compares With the 1970s

History never repeats perfectly, and I certainly don’t expect the current cycle to unfold exactly like the one we experienced during the 1970s. Every cycle has its own characteristics, policymakers face different constraints and financial markets continue to evolve. Even so, when I compare today’s macro environment with the conditions we have just discussed, I see enough similarities that I still believe the current regime remains supportive for gold.

The first similarity that stands out to me is confidence in the Federal Reserve.

As we saw in the previous section, one of the main reasons gold performed so well during the 1970s was not simply because inflation was high. Investors gradually stopped believing that the Federal Reserve would maintain restrictive monetary policy long enough to restore price stability. Confidence deteriorated over time, and that made alternative monetary assets increasingly attractive.

I don't think today's situation is identical to the 1970s, but I do think confidence in the Federal Reserve has gradually weakened again over the past few years.

Markets continue to discuss the possibility of higher interest rates whenever inflation surprises to the upside. Yet I rarely get the impression that investors genuinely believe the Federal Reserve is prepared to maintain substantially tighter financial conditions for several years if that is what inflation ultimately requires. My subjective impression is that the primary objective today is to reduce inflation while causing as little economic stress as possible. Fighting inflation remains important, but avoiding unnecessary damage to the economy appears equally important, if not more so.

To be fair, I understand why policymakers think this way. The United States is operating under a very different fiscal backdrop than it was forty or fifty years ago. Running large fiscal deficits while servicing a debt burden exceeding 120% of GDP leaves much less room for aggressive monetary tightening than existed during the Volcker era. Keeping interest rates elevated for a prolonged period increases the government’s own financing costs, making the policy trade-offs considerably more difficult than they once were.

That brings me to what I think is the second major similarity: fiscal concerns.

Unlike the 1970s, today’s fiscal deficits are historically large even though the economy is not experiencing a deep recession. Federal debt has reached levels never before seen in peacetime, while Treasury yields remain relatively elevated, increasing the cost of servicing that debt every year. None of this guarantees higher inflation on its own, but it does make the Federal Reserve’s task substantially more complicated than it would otherwise be.

At the same time, inflation itself has proven more persistent than many investors expected. Although it has declined significantly from its 2022 peak, inflationary pressures have not disappeared, and recent data suggest that price growth continues to exceed productivity growth in several parts of the economy. That combination is rarely comfortable late in the business cycle. Historically, gold has often performed well during this phase because investors begin paying closer attention to preserving purchasing power rather than maximizing economic growth.

The geopolitical backdrop also reminds me more of the 1970s than of the decades that followed. The war in Ukraine continues with no obvious resolution, tensions involving Iran have intensified considerably, China continues expanding its influence as a global power and the possibility of a broader regional conflict in the Middle East cannot simply be dismissed. Every conflict has its own political context, but wars tend to share one economic characteristic: they are rarely disinflationary.

That becomes even more relevant when energy markets are involved. One scenario that markets continue monitoring closely is the possibility of prolonged disruptions to oil flows through the Strait of Hormuz. Whether that ultimately happens is impossible to know today, but history has repeatedly shown that major disruptions in global energy supply tend to create inflationary pressure precisely when central banks would prefer the opposite.

None of these observations guarantees that gold will continue appreciating from here. Markets never offer that kind of certainty. But this is, at least for now, a regime in which I still find it difficult to be bearish on gold.

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What Could Change My View on Gold?

If my interpretation of the current regime is broadly correct, the next question naturally becomes whether something could end this environment in the near future. In other words, what would have to happen for me to become much less constructive on gold?

I don’t think the answer is straightforward, because today’s constraints are very different from those Paul Volcker faced more than four decades ago.

When Volcker began aggressively tightening monetary policy, US federal debt stood at roughly 30% of GDP. Raising interest rates certainly created a painful recession, but it did not dramatically increase the government’s own financing costs because the debt burden itself remained relatively modest.

Today’s situation looks fundamentally different.

Federal debt has climbed above 120% of GDP, and every percentage point increase in interest rates translates into substantially higher interest expenses as existing debt matures and must be refinanced. That does not mean the Federal Reserve cannot keep monetary policy restrictive if necessary. It certainly can. What it does mean, in my opinion, is that maintaining very high interest rates for many years has become considerably more expensive than it was during the early 1980s.

When I look at today’s situation, I think there are only a handful of realistic paths forward.

The first is to inflate the debt away through a prolonged period in which nominal economic growth exceeds the real burden of government debt. This is often described as financial repression. It is far from ideal, but politically it is probably the easiest path because it spreads the adjustment across the entire economy rather than forcing one group to absorb the full cost immediately. Savers gradually lose purchasing power, while the real value of outstanding debt slowly declines.

The second possibility is for the economy to grow faster than the debt. That would clearly be the best outcome. Strong productivity growth, technological innovation and sustained economic expansion could gradually reduce the debt burden without requiring painful fiscal adjustments or persistently higher inflation. The difficulty is that generating this type of growth over many years is exceptionally challenging. Policymakers can encourage productivity, but they cannot simply legislate it into existence.

A third option is fiscal consolidation through higher taxes, lower government spending or some combination of both. On paper, this sounds relatively simple. Politically, I think it is probably the hardest solution of all. Every spending programme has beneficiaries, every tax increase creates opposition and elected officials naturally operate within relatively short election cycles. The benefits of fiscal discipline usually emerge years later, while the political costs are felt almost immediately. Unless circumstances deteriorate much more dramatically than they have so far, I struggle to see this becoming the preferred path.

A fourth possibility would resemble the early 1980s: allow inflation to remain elevated for some time before introducing a new Volcker-style stabilisation. I certainly cannot rule that out, but I currently view it as less likely. As I explained earlier, I don’t think today’s institutional and fiscal constraints resemble those that existed during Volcker’s tenure. Maintaining extremely restrictive monetary policy for several years would place enormous pressure not only on households and businesses, but also on the government’s own financing costs. That makes such a strategy much harder to sustain politically than it was four decades ago.

The final possibility is some form of default or debt restructuring. In my opinion, this remains the least likely scenario. One important reason is that the United States borrows primarily in its own currency. Unlike countries that accumulate large amounts of foreign-currency debt, the US government retains far greater flexibility because it ultimately controls the currency in which its obligations are denominated. An outright default would fundamentally undermine the role of US Treasuries as the foundation of the global financial system.

When I weigh these five possibilities against one another, I keep arriving at the same conclusion. None of them is painless, and none of them should be presented as inevitable. Markets have a remarkable ability to surprise us, particularly when unexpected crises emerge and completely change the environment. A severe deflationary recession, a major financial accident or another shock that sharply reduces demand could quickly alter the regime we are discussing today. In that type of environment, gold would likely face a much more challenging backdrop.

I do believe that a more deflationary environment will eventually emerge because economic cycles have not been abolished. I simply don’t know when that transition will occur. Until the conditions actually begin changing, I don’t want to become excessively defensive and risk missing what could still be a significant move higher in gold.

That thinking is ultimately reflected in my own portfolio. At the moment, gold is one of only two core positions I hold alongside Bitcoin. If you’re interested in seeing how I’m currently positioned, you can find my latest portfolio update here:

Mladen Talks Crypto

Portfolio Update July 2026: Staying Patient While Conditions Remain Supportive

Welcome to another edition of Mladen Talks Crypto, a newsletter for serious retail crypto investors who don’t chase narratives but instead seek to understand markets through the lens of financial conditions…

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a month ago · 6 likes · Mladen Talks Crypto

Final Thoughts

No one knows exactly how this cycle will unfold, and I certainly don’t claim to. Markets have a habit of changing direction when investors become most confident in a particular outcome. That is why I think it is important to stay flexible and continuously reassess the conditions rather than become attached to a single narrative. As things stand today, I still believe the current macro environment remains supportive for gold, but I’ll be equally willing to change my view if the regime changes.

For those who don’t know me, I’m a retail investor focused primarily on on-chain assets. My long-term objective is simple: to outperform the S&P 500 over the next decade by investing almost exclusively in blockchain-based assets. Tokenized gold represents one of my two largest positions alongside Bitcoin. If you’d like to follow how I manage my portfolio as market conditions evolve, I’d be happy to have you as a subscriber.

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I’m also curious whether you see the current environment the same way I do. Do you think gold still has room to run, or do you see something that I may be overlooking? Let me know in the comments. I genuinely enjoy reading different perspectives, especially when they’re backed by solid reasoning.

Thank you very much for reading, and I’ll see you in the next one. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

When I published my first post on Substack, my goal wasn’t to present a perfect portfolio or claim that I had found a formula that always beats the market. I wanted to build a public investment journal where every decision, every rebalance and every period of underperformance would remain visible for everyone to judge over time. If you haven’t read that first post yet, you can find it here:

Over the past month, my portfolio return has barely changed. The main reason is that the rise in Bitcoin was almost completely offset by a decline in gold, leaving the overall performance largely unchanged. Even so, my portfolio continues to outperform both Bitcoin and the total crypto market since I started tracking it publicly, while still trailing the S&P 500 over the same period.

That is perfectly acceptable to me because this publication is not about winning every month. My objective is ambitious, but also very clear: over the next decade and beyond, I want to demonstrate a strategy that can outperform the total crypto market, Bitcoin and, ideally, the S&P 500. To achieve that, I believe the strategy has to remain simple. It should rely on a small number of assets, require only a handful of portfolio rebalances each year, provide better protection during crypto bear markets and still participate meaningfully when conditions become favourable again.

I also hope that, over time, this journal becomes useful for several types of investors. Some readers may be completely new to crypto and looking for a structured way to approach the market. Others may already have years of experience but are searching for a different framework that focuses less on narratives and more on macroeconomics.

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With that in mind, this monthly update is simply a transparent review of where the portfolio stands today, how it has performed over the past month and what I have been watching since the previous update.

Portfolio Performance Since the Last Update

One month rarely changes a long-term investment thesis, and this month was a good example of that. My portfolio remained almost exactly where it was at the beginning of the month, finishing at a -17.3% drawdown since I started tracking it publicly at the end of December 2025. The main reason was relatively straightforward. Bitcoin recovered part of its previous decline, while gold lost a similar amount over the same period. The two moves largely cancelled each other out (talking about the correlation between gold and “digital gold” 😅)

Bitcoin reduced its drawdown from -28.5% to -26.5%, while the total crypto market improved slightly from -26.4% to -25.7%. Meanwhile, the S&P 500 gave back a small portion of its gains and now stands at approximately +7.0% since my tracking period began, compared with roughly +7.9% almost a month ago.

Looking at the entire period rather than just the latest month, I remain satisfied with where the portfolio stands. It continues to outperform both Bitcoin and the broader crypto market despite maintaining a more defensive allocation for most of this cycle. Compared with Bitcoin, my drawdown is currently 9.2 percentage points smaller. Against the total crypto market, the difference is 8.4 percentage points.

The comparison with the S&P 500 is less encouraging. My portfolio currently underperforms the index by 24.3 percentage points (🤕). Even so, I think there are reasons to remain patient. It looks as though some of the M7 companies are beginning to face increasing investor scrutiny over the scale of their AI-related spending, while gold also appears to have either found, or be approaching, an important bottom as inflation pressures continue to build. If that assessment proves correct, both developments could gradually become more supportive for my portfolio vs. S&P over the coming months.

Why My Allocation Remains the Same

The portfolio itself remains very simple. At the moment, I hold only two assets: tokenised gold and Bitcoin. That simplicity is intentional. One of the main ideas behind this public portfolio is to show that outperforming the broader crypto market does not necessarily require dozens of positions, frequent trading or constantly chasing new narratives. My preference is to own a small number of assets and make changes only when I believe market conditions have changed enough to justify them.

The last portfolio rebalance took place on 23 April 2026, and it remains the only rebalance I have made this year. Unless the market moves into one of the levels I have already identified, I do not expect that to change anytime soon. Rather than reacting to headlines or short-term price action, I prefer to define potential allocation changes in advance and simply wait.

Within my existing Gold/BTC allocation, there are two levels I am currently watching closely. If the Gold/BTC ratio reaches approximately 0.08, my intention would be to rebalance the portfolio into a 50% Bitcoin and 50% gold allocation. If the ratio falls further towards 0.0525, I would likely increase my exposure to gold even more, moving to roughly 75% gold and 25% Bitcoin. Whether either level is reached depends on how both assets perform over the coming months, but having these decisions planned in advance removes much of the emotion from investing.

Outside my current positions, I continue to monitor Ethereum and Solana almost every day. That does not mean I am ready to buy them today. My view remains that either financial conditions need to become considerably more supportive, or valuations need to become significantly more attractive before I begin allocating part of the portfolio to either asset. At the moment, I would become much more interested if Ethereum approached $1,200 or Solana traded closer to $60. I have not yet decided what percentage of the portfolio I would allocate, because that decision will also depend on the broader macro environment at the time.

Beyond those larger networks, I also follow a number of smaller projects built on Ethereum and Solana, as well as NEAR, which I currently see as one of the most interesting blockchain ecosystems for AI-related applications. Even so, I think there is a meaningful difference between following a project and investing in it. Smaller crypto assets tend to perform best when financial conditions become highly supportive for risk-taking, similar to what we experienced after the large Covid-driven market decline in 2020. Until I see an environment that resembles those conditions, I have little interest in moving further out on the risk curve.

If you’re interested in how I evaluate those macro conditions each month, consider subscribing to Mladen Talks Crypto. Every month I publish detailed macro updates explaining how financial conditions are evolving, what they may imply for crypto markets and, just as importantly, what would have to change before I become constructive on altcoins.

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How Financial Conditions Shape My Portfolio

If you’ve been following my work for a while, you’ll know that financial conditions remain the foundation of my investment framework. I think they explain far more about the behaviour of crypto markets than most narratives do. Today, financial conditions in the United States remain loose and continue to ease. In my opinion, that is unlikely to remain sustainable for an extended period because inflation already appears increasingly difficult to control. If you would like a more detailed explanation of how I currently view the macro environment, I covered it in depth in this month’s macro update:

Mladen Talks Crypto

Why Loose Financial Conditions Aren't Enough for Crypto

Every month I publish an update explaining how I currently understand the macro environment and how it influences my positioning in the crypto market. In this article, I want to explain why I still believe we are in the later phase of the business cycle, why financial conditions continue to loosen, why that is potentially supportive for risk assets over…

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2 months ago · 7 likes · 1 comment · Mladen Talks Crypto

That macro backdrop shapes how I think about crypto today. On one hand, markets have already benefited from a long period of easier financial conditions, which makes me sceptical that we will see an altcoin season comparable to 2020 and 2021. Those were unusually supportive conditions, and I don’t think it makes sense to assume they will repeat any time soon.

That is also why I remain comfortable holding both gold and Bitcoin today. In my view, gold remains one of the strongest assets to own in an environment where inflation risks continue to build. It currently trades around 30% below its historical all-time high, while central banks continue adding to their gold reserves around the world. Those are conditions I find difficult to ignore.

I also think Bitcoin deserves a place in the portfolio. Financial conditions have not tightened yet, and while that remains true, Bitcoin still has room to benefit. It also trades around 50% below its historical all-time high, which, in my opinion, leaves it much closer to a long-term bottom than many investors appreciate.

Of course, markets are under no obligation to validate my framework. My interpretation may prove wrong, and that is one of the reasons I publish this portfolio publicly. Over time, the results will show whether my conclusions about the current regime were justified or whether I need to rethink parts of my investment process.

Final Thoughts

Thank you for taking the time to read this month’s portfolio update. 🙏

If you’re new here, my name is Mladen, and I’m a retail crypto investor who has been publicly documenting my investment strategy since December 2025. In this newsletter, I want to show how I think about investing, how I adapt to changing market conditions, and whether a simple, disciplined strategy can outperform the broader crypto market over the long run.

One of the reasons I decided to make this portfolio public is that transparency forces accountability. Every allocation, every rebalance and every period of underperformance remains visible. That also means I’ll inevitably make mistakes along the way. I’m perfectly comfortable with that because I’d rather have an investment process that can be evaluated over many years than one that only looks convincing in hindsight.

If that approach resonates with you, I’d be happy to have you as a subscriber. Every month I publish a complete portfolio update, explain any changes I’ve made, and share how I currently interpret financial conditions and their implications for crypto markets. Everything is available free of charge for now because my primary objective is to build a long-term public record of my investment decisions and reasoning.

I’d also love to hear your perspective.

Do you agree with my current allocation between gold and Bitcoin, or do you think other crypto assets deserve a place in the portfolio today? If your view differs from mine, I’d genuinely like to understand why. Feel free to leave a comment below or even share an article you’ve written on the subject. One of the reasons I enjoy writing publicly is that thoughtful disagreement often leads to better ideas, and I think that’s far more valuable than simply surrounding ourselves with opinions we already agree with.

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Thank you again for reading, and I’ll see you in next month’s update. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

The goal of these monthly updates is to summarize my current reading of the Adjusted National Financial Conditions Index (ANFCI) and explain how it shapes my view of the crypto market. ANFCI is an adjusted financial conditions index built from 105 financial indicators that collectively measure how supportive or restrictive the U.S. financial system is. In my opinion, it remains one of the best ways to understand whether financial conditions are becoming easier or tighter over time. Since crypto assets tend to respond strongly to changes in financial conditions, I consider it one of the most important indicators I follow.

Nothing has changed since my previous portfolio update regarding the positions I currently hold or the reasoning behind them. If you would like to understand why my portfolio is currently allocated the way it is, you can read that article here:

If this way of thinking about crypto investing is useful or offers you a different perspective, consider subscribing. My goal is simply to share my investment process as transparently as possible, and with that, let’s begin.

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This Month's ANFCI Reading

Financial conditions continue to move in the same direction they have followed since late 2022. The broader trend remains one of gradual easing, and last week’s update, ending July 10, 2026, did little to change that picture. ANFCI currently stands at -0.54, indicating that financial conditions remain loose. This is slightly lower than last month’s reading of -0.51, meaning conditions have become somewhat more supportive over the past week(s). The current level is also very close to the lows reached around the end of 2025 and the beginning of this year, when the index briefly touched -0.56.

Looking at the individual components, market risk became slightly more supportive, with its contribution moving from -0.33 to -0.35. Conditions also became marginally more favorable for leverage, with that subindex moving from -0.05 to -0.06, while credit conditions remained unchanged at -0.15. None of these changes are dramatic on their own, but together they continue to point toward an environment that remains supportive for risk assets.

The breadth of the index tells a similar story. Out of the 105 indicators included in ANFCI, only three currently indicate tighter-than-average financial conditions, while 102 remain looser than their historical averages. Looking only at the weekly changes, 62 indicators moved toward further easing, while 43 moved toward tighter conditions. The majority therefore still points in the direction of easier financial conditions.

Several individual indicators currently make the largest contributions to the overall index. The SOFR-Treasury 3-month spread remains the single biggest contributor. In simple terms, it measures stress in short-term funding markets. Lower spreads generally suggest that borrowing between financial institutions remains healthy, which supports liquidity across markets.

The BofAML 3-5 Year AAA CMBS Option-Adjusted Spread measures how much additional yield investors demand to own highly rated commercial mortgage-backed securities instead of government bonds. Lower spreads suggest investors are comfortable taking credit risk, which is generally supportive for financial markets.

The 30-year Jumbo-Conforming fixed mortgage spread compares borrowing costs for larger mortgages with standard conforming loans. Narrower spreads usually indicate smoother credit markets and healthier lending conditions.

The 3-month interbank deposit spread measures funding conditions between banks. Lower values typically signal that banks remain comfortable lending to one another, reducing financial stress.

Finally, the Bloomberg U.S. Government Securities Liquidity Index tracks liquidity in the Treasury market. Better liquidity makes it easier for large investors to buy and sell government bonds efficiently, which helps financial markets function more smoothly overall.

What This Means for My Portfolio

Taken together, ANFCI continues to suggest that financial conditions are loose and have become slightly looser than they were one week ago. They are also looser than they were one month ago and currently stand at their easiest levels in roughly the past five months, although they remain slightly above the extreme reached around the turn of the year.

The last time conditions were this supportive was around the end of 2025 and the beginning of 2026, a period during which the crypto market appreciated by roughly 15%.

If we observe another period of strength in the coming weeks, I would not find that surprising.

Where I become more cautious is when thinking about how much further financial conditions can realistically loosen from here. We are already close to some of the easiest readings seen over the past four and a half years. At the same time, inflation remains well above the Federal Reserve’s long-term objective, while geopolitical risks, including tensions in the Middle East, continue to create uncertainty. In my opinion, there simply is not much room for policymakers to continue encouraging easier financial conditions without risking even higher inflation. While I cannot completely rule out further easing, I think such an approach would likely make future adjustments more painful by allowing leverage and credit to build even further before eventually being corrected.

For that reason, I think risk assets, including crypto, could still perform somewhat well over the coming weeks or even months if financial conditions continue to loosen. However, I remain unconvinced that this environment provides enough fuel for the type of broad altcoin season many investors are expecting.

This is also why I remain comfortable with my current portfolio allocation. Bitcoin allows me to participate if risk assets continue moving higher, while tokenized gold provides exposure to an asset that has historically benefited from persistent inflation and still trades roughly 30% below its all-time high. From my perspective, this combination offers an attractive balance between participating in further upside and protecting against macro risks that I believe are still very much present.

If you would like to understand this allocation in greater detail, I encourage you to read my latest portfolio article (👆) or subscribe to follow my future updates (👇). I publicly share how I structure my portfolio over time, how I think about allocation decisions, and how I hope to outperform the S&P 500 over the long run through a disciplined investment process.

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As always, this is simply my current interpretation of the available data. Markets have a way of surprising everyone, and time will ultimately determine whether this analysis proves correct.

Before You Go

Thank you for taking the time to read this month’s ANFCI update.

My name is Mladen, and since December 2025 I have been publicly documenting how I invest in crypto. My goal has never been to predict every market move. Instead, I want to offer a different perspective on crypto investing by showing my reasoning and my long-term results as they develop over time. I believe transparency is a much better teacher than hindsight.

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I would genuinely like to hear your opinion:

• Do you agree that financial conditions remain the most important macro driver for crypto today?

• Do you see the current environment differently?

If you think I’m overlooking something, let me know in the comments. Some of the best ideas come from thoughtful disagreements, and I always enjoy discussing different views with serious investors. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

I found myself agreeing with almost everything he said about today’s financial markets. But then the conversation shifted to crypto. Like many successful investors before him, he argued that cryptocurrencies and Bitcoin have no real value, that they exist primarily because criminals need a way to move money, and that blockchain is ultimately a technology the world could live without.

What surprised me wasn’t that Jeremy Grantham dislikes crypto. Everyone is entitled to their own investment thesis, and I have no problem with someone deciding that crypto simply isn’t an attractive place to invest. What surprised me was something else. Listening to his explanation, I had the feeling that he wasn’t really criticizing the crypto industry as it exists today.

He was criticizing an idea of crypto that I don’t think reflects reality anymore.

And over the years, I’ve noticed the same pattern surprisingly often. Some of the most accomplished investors or financial professionals in the world can explain in extraordinary detail why they like equities, commodities or real estate. Yet when the conversation turns to crypto, many of them suddenly reduce an entire industry to a handful of arguments that no longer describe what the industry has become.

Expertise Has Its Boundaries

One thing I have learned over the years is that being an exceptional investor doesn’t automatically make someone an expert in every industry. And that shouldn’t be controversial.

Warren Buffett has never tried to become an expert in biotechnology, and Charlie Munger openly admitted there were businesses he simply didn’t understand well enough to invest in. Great investors usually become great by staying within their circle of competence rather than pretending to understand everything.

I think crypto is often outside that circle and that’s perfectly fine. But what happens next is what becomes interesting. Instead of saying, “I don’t understand this industry well enough,” many investors become surprisingly confident in explaining why the industry itself has no value. That confidence always catches my attention because the arguments are remarkably similar:

”….Crypto is only speculation…”

“…Crypto is only for criminals…”

“…Crypto produces nothing…”

“…Crypto has no real-world use…”

I don’t think these conclusions come from studying today’s blockchain ecosystem. I think they come from looking at the industry through a definition that is now more than a decade old.

Crypto Is Not One Investment

The more I listened to arguments like these, the more I realized that almost all of them have one thing in common. They treat crypto as though it were a single product or a single investment. Personally, I don’t think that’s a useful way to look at the industry anymore. The word crypto has gradually become an umbrella term for technologies and products that often have very little in common beyond the fact that they use blockchain.

If someone says that Bitcoin has no intrinsic value, that’s one discussion, and if someone thinks Ethereum is overvalued, that’s another. At the same time, stablecoins solve a completely different problem than Bitcoin, while tokenized gold has very little in common with either of them from an investment perspective. The same applies to decentralized exchanges, lending protocols, prediction markets, tokenized RWAs, NFT marketplaces or digital identity systems. They all use blockchain, but they weren’t built for the same purpose.

To me, that is similar to looking at Amazon, Wikipedia and an online casino and concluding that they should all be evaluated in exactly the same way because they use the internet. The technology may be shared, but the businesses built on top of it are completely different. I think blockchain should be viewed in much the same way.

Looking Beyond the Blockchain

This is also one of the reasons why my own perspective differs from that of many traditional investors.

When I look at blockchain, I don’t immediately ask whether “crypto” has value. Instead, I first try to understand what problem a particular product is trying to solve and whether blockchain actually improves the way that problem is solved. Sometimes the answer is yes, sometimes it isn’t. I don’t believe blockchain is automatically a better solution for everything, and I don’t think every business needs it. But there are situations where I believe it offers clear advantages over traditional infrastructure.

A good example is one of the largest positions in my own portfolio. Around half of my portfolio is currently allocated to tokenized gold.

I don’t own that position because I wanted greater exposure to crypto. I own it because I wanted exposure to gold, and tokenization happens to be the way I chose to own it. Each token represents ownership of physical Gold held by the issuer. From my perspective, blockchain simply makes that ownership easier to transfer, easier to settle and easier to access globally. In this case, my investment thesis isn’t based on blockchain itself but on gold. Blockchain is simply the technology that makes owning that gold more practical.

Another good example are stablecoins. They are digital fiat currencies (and mostly dollars at the moment) that can be transferred almost instantly, settled at any time of the day and integrated into applications in ways that traditional banking infrastructure still struggles to match. Again, the interesting part isn’t the blockchain itself but what blockchain allows that product to do.

Speculation Doesn’t Define an Industry

Of course, none of this means I believe the crypto industry is without problems. Quite the opposite. Anyone who has spent enough time in this market knows how much speculation exists. Thousands of projects have been created over the years, many of which will probably disappear without leaving any meaningful impact. Unfortunately, fraud is also part of this industry, and I don’t think anyone should ignore that reality.

Where my opinion differs is in what those observations actually tell us. To me, the existence of speculation doesn’t automatically say much about the underlying technology. It says much more about the stage of development the industry is currently going through.

History gives us many similar examples. The railway industry experienced enormous speculation before becoming one of the foundations of modern economies. The internet went through the dot-com bubble, where thousands of companies disappeared while the technology itself continued transforming almost every aspect of our lives. Artificial intelligence is following a similar path today. Alongside genuine innovation, we also see unrealistic expectations, excessive valuations and countless projects that may never justify them.

Looking back, we never judge those technologies by the number of speculative companies they produced but by the problems they solved and the value they created over time. I think blockchain deserves to be viewed through the same lens.

That doesn’t mean every project will survive, and it certainly doesn’t mean every investment will be successful. In fact, I expect the opposite. Most projects will probably disappear over time but it doesn’t mean the technology itself has failed.

Asking Better Questions

The reason I wanted to write this article wasn’t to convince anyone that crypto is destined to succeed or that blockchain will eventually replace every existing financial system. I don’t believe either of those statements can honestly be made today.

Like every new industry, blockchain will probably produce far more failures than long-term successes. Many of today’s projects will disappear, some investment theses will prove to be completely wrong, and new ideas that barely exist today may eventually become much more important than the projects everyone is currently talking about. If history teaches us anything, it is that technological progress is rarely a straight line.

What I do think, however, is that discussions about crypto often begin from a definition of the industry that no longer reflects what it has become. The word crypto is still frequently used as though it describes a single investment or a single technology, when in reality it has evolved into an ecosystem of very different products and services that happen to share the same underlying infrastructure.

That is why I have become much less interested in answering the question of whether “crypto” has value. I don’t think it is a particularly useful question anymore. The more interesting question, at least from my perspective as an investor, is which parts of this industry are solving real problems and how to distinguish them from those that are unlikely to survive.

That is also one of the reasons I continue spending so much time studying crypto. I believe the investment opportunities over the next decade will come from understanding where this technology genuinely creates value and where it doesn’t. Perhaps that is also why I remain much more optimistic about the long-term future of this industry than many investors I deeply respect.

If you enjoy thinking about crypto through the lens of technology and long-term investing rather than short-term narratives, I’d be happy to have you here. 🍻

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One of the goals of this newsletter is to document my own investment journey as transparently as possible. Over the next 10+ years, I’ll be sharing every important portfolio decision, every rebalance and the reasoning behind it, with the long-term objective of outperforming not only the broader crypto market and Bitcoin, but eventually the S&P 500 as well.

If you’re new to Mladen Talks Crypto, I recommend starting with my Crypto Investment Strategy Explained article. It outlines the investment framework behind every portfolio update and every allocation decision I publish, making it the best place to understand how I approach investing in this market.

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

What exactly is your investment strategy?

This article is my answer.

Everything I publish, from monthly portfolio updates to macro analyses and allocation changes, follows the same investment framework. Rather than explaining pieces of it every time I write, I wanted to put everything in one place. If you’re new here, start with this article. If you’ve already been following my work, this should make future posts easier to understand.

My investment approach is the result of almost 5 years spent studying the crypto market, macroeconomics, financial conditions and investor behavior. More importantly, it comes from learning through my own mistakes. Every principle described here has influenced how I invest my own capital today.

My long-term objective is ambitious but straightforward. Over the next decade, I want to build a strategy that outperforms Bitcoin, the broader crypto market, and the S&P 500, while making not more than 10 portfolio changes per year. I also want to document that journey publicly, with both the good decisions and the bad ones, so anyone can judge the strategy based on transparent results rather than hindsight.

What This Strategy Provides

• 😎 Easy to follow for any retail investor with a crypto wallet or a centralized exchange account.

• 📊 Built around market and macro regimes, not daily price movements.

• 💎 Uses only crypto assets, without leverage or short selling.

• 🔄 Requires only a handful of allocation changes each year, instead of constant trading.

• 📖 Fully transparent, with every portfolio update, rebalance and performance review shared publicly.

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How I Make Investment Decisions

My investment strategy is built around four areas that I believe have the biggest influence on crypto markets over time:

• US financial conditions

• US economic growth

• US inflation

• Financial markets sentiment

Each of them answers a different question.

Together, they form the framework behind every allocation decision I make.

It Starts With the US

Every week, I spend far more time analyzing the US economy than reading crypto news.

And the answer why is simple.

The United States remains the center of the global financial system. It has the largest capital markets, the world’s reserve currency, and many of the institutions that now shape the crypto industry are based there. Whether we look at ETF flows, institutional adoption, monetary policy, or liquidity, developments in the US continue to have an outsized influence on crypto markets.

Historical crypto market cycles illustrate this relationship well:

The 2020 bull market did not begin simply because crypto suddenly became attractive. One of its biggest drivers was the enormous increase in US liquidity following the Covid recession. Financial conditions became supportive, investors were encouraged to take more risk, and crypto benefited alongside many other risk assets.

The opposite happened in 2022. US CPI inflation accelerated to 9.1% year over year, forcing the Federal Reserve to begin an aggressive tightening cycle. Higher interest rates tightened financial conditions, reduced liquidity and contributed to one of the deepest bear markets crypto has experienced.

Financial Conditions Come First

If I had to choose only one part of my investment framework, it would be financial conditions.

The reason is that financial conditions largely determine whether markets operate in a risk-on or risk-off environment. Liquidity, interest rates, credit markets, bond markets and several other indicators together tell me whether capital is becoming easier or more expensive to access. I currently monitor around ten indicators that help me evaluate this environment.

The most important part of my analysis is not identifying a regime after everyone already agrees it exists, but recognizing when the market begins transitioning from one regime to another, and acting accordingly.

Those transition periods are where I make the most important investment decisions.

During a late tightening → early easing transition, I gradually begin increasing exposure to risk assets. Historically, Bitcoin tends to respond first. Large-cap alts like Ethereum and Solana often follow, while smaller ones usually perform best only after financial conditions continue improving and investor risk appetite becomes much stronger.

The opposite transition is equally important.

When financial conditions begin moving from late easing → early tightening, I gradually reduce portfolio risk. Altcoins are usually the first assets I reduce, while Bitcoin and tokenized gold become a larger part of my portfolio.

Once those allocation decisions are made, I usually have very little to do.

Economic Growth Signals Change

Financial conditions don’t change on their own. One of the biggest drivers behind those changes is the economy itself.

This is why I closely monitor economic growth alongside financial conditions.

A slowing economy often forces central banks to reconsider their policy. For example, if unemployment begins rising and businesses become more cautious, the Federal Reserve has a stronger incentive to lower interest rates and make borrowing cheaper. The goal is to encourage companies to invest, hire new employees, and support economic activity.

Crypto doesn’t usually react because unemployment changes, but because financial conditions often change afterward.

That’s why I don’t treat economic indicators as investment signals on their own. Instead, I use them to understand where financial conditions are likely heading next.

To build that view, I currently monitor around 5-10 economic indicators that I consider the most relevant for my investment process, including US unemployment rate, ISM PMI, and industrial production index, among others.

Inflation Shapes the Next Regime

Inflation is the second major piece of the puzzle.

Together with economic growth, it largely determines whether financial conditions are likely to become more supportive or more restrictive in the future.

A good example was 2022. As I mentioned above, US CPI inflation accelerated to 9.1% year over year, forcing the Federal Reserve to begin one of the fastest tightening cycles in recent history.

Today, I follow inflation because it often explains why central banks change policy, and those policy changes eventually influence every major asset class, including Bitcoin and Ethereum.

To evaluate that risk, I currently monitor around ten inflation indicators that together help me understand whether price pressures are increasing or easing.

Market Sentiment as Confirmation

Financial conditions tell me how I see the current investment environment, but market sentiment helps me understand whether other investors see it the same way.

My macro analysis is the foundation of every investment decision I make. However, no analytical framework is perfect. There is always a possibility that I have misinterpreted the direction of financial conditions or that the market has already started pricing something I haven’t fully recognized yet.

That is why I also monitor market sentiment. It serves as an additional layer of confirmation. If investors are gradually positioning themselves in a way that supports my macro analysis, my confidence in that conclusion increases. If not, I don’t immediately assume the market is wrong. Instead, I go back to my analysis and try to understand what I might be missing.

Because of that, I don’t use market sentiment to replace my macro analysis. I use it to confirm or challenge it.

To do that, I monitor indicators such as the US Dollar Index (DXY), the relationship between 2-year and 10-year Treasury yields, the bond market, the earnings of equities versus Treasury yields, and several other indicators that reflect how investors are positioning their capital.

I don’t expect these indicators to predict the future. I use them to answer a much simpler question:

Does the market appear to be recognizing the same change in conditions that my macro analysis suggests?

When the answer is yes, I become more confident in my allocation decisions. When the answer is less clear, I become more careful before making meaningful portfolio changes.

My Allocation Framework

Once I have formed a view on the current market regime, portfolio allocation becomes relatively straightforward.

During the transition from late tightening to early easing, I gradually increase portfolio risk.

Bitcoin is usually the first asset I accumulate because it has historically responded well during the early stages of improving financial conditions while remaining less volatile than most of the crypto market.

As confidence in the new regime increases, I begin allocating capital toward Ethereum and Solana. If financial conditions continue improving and the market enters a broad risk-on environment, I may eventually allocate a smaller portion of the portfolio to selected projects within those ecosystems (like Uniswap, Jupiter, PUMP, Aave,…)

Historically, the strongest performance from smaller altcoins has often arrived several months after Bitcoin and the largest cryptocurrencies had already started moving higher. That is one reason I prefer increasing portfolio risk gradually instead of trying to buy everything at once.

The opposite happens during the transition from late easing to early tightening.

As conditions begin deteriorating, I gradually reduce exposure to higher-risk assets. Bitcoin and tokenized gold become the core of my portfolio because I believe they provide a more resilient allocation during those environments.

Stablecoins may still become part of my portfolio temporarily if market conditions justify it, although I expect their role to become smaller over time. My preference is to remain invested whenever possible, and I currently believe tokenized gold offers a more attractive long-term defensive allocation than simply holding cash equivalents.

What You’ll Find in This Newsletter

The goal of this newsletter is not simply to tell you what I own.

I want you to understand why I own it.

Every portfolio update explains my current positioning. Every macro report explains how financial conditions are evolving. Every allocation change is linked to the same investment framework you’ve just read.

If you decide to follow this newsletter, you won’t need to spend hours every week reading economic reports or trying to understand dozens of conflicting opinions on social media.

I do that work myself.

You get the conclusion, the reasoning behind it and a transparent record of how the strategy performs over time.

In practice, staying up to date with my research takes only a few minutes each week.

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Why This Newsletter Exists

When I first became interested in crypto, I quickly realized that finding good information was much harder than finding confident opinions.

Much of the content online is built around excitement, fear or certainty about what happens next. Sometimes it comes from genuine optimism. Sometimes it comes from people whose incentives are very different from those of their audience.

The result is usually the same.

Many retail investors take too much risk near market tops and become overly pessimistic near market bottoms. During bull markets, they often end up owning assets that never become market leaders. During bear markets, many hold those same assets simply because they hope prices will eventually recover.

I’ve been there myself.

That’s one of the reasons this newsletter exists.

I don’t want to build a community around predictions. I want to build one around understanding.

Everything I publish is based on the same question:

Given today’s conditions, how should I position my portfolio?

There are no guarantees that my answers will always be correct. Markets are uncertain by nature.

What I can promise is that every investment decision I make will be explained openly, documented transparently and judged by its long-term results rather than short-term narratives.

Over the years, I’ve spent thousands of hours studying markets, testing ideas and trying to understand which indicators actually matter. Now I think it’s time to share that work with anyone who wants to become a better investor alongside me.

Who Is Mladen?

My name is Mladen, and I’m a medical doctor by profession.

I don’t come from a finance background, and I don’t work in the investment industry. Everything I’ve learned about investing has come from studying, making mistakes and continuously trying to improve my own decision-making.

Like many crypto investors, I experienced the extraordinary gains of the 2020-2021 bull market.

I also experienced what happened afterward.

During the 2022 bear market, I gave back almost all of the profits I had made during the previous cycle. Looking back, that period became the most valuable investment lesson I’ve ever had. It forced me to stop chasing narratives and start asking much harder questions about risk, market cycles and portfolio management.

That journey eventually led to the framework you’ve just read.

Today, I invest according to that framework with my own capital, and I want to document every important decision publicly.

I live and work in Vienna with my wife and our three young daughters.

My long-term goal is to become financially independent and build an additional source of income that I can continue reinvesting into the crypto market.

If my research helps other retail investors avoid some of the mistakes I made and improve their own investment process along the way, then this newsletter will have achieved exactly what I hoped it would.

If that sounds like the kind of community you’d like to be part of, I’d be happy to have you here. Subscribe, and let’s build a more thoughtful way of investing in crypto together. 🍻

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Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

As many of you already know, 100% of my liquid investment capital is allocated to cryptocurrencies or crypto-related assets. That makes every allocation decision meaningful, because I invest exactly the way I write.

Since I started publishing monthly portfolio updates at the end of 2025, my portfolio has outperformed both Bitcoin and the total crypto market. I am happy with that progress, but I do not consider it a success yet. My long-term objective is to outperform not only crypto, but also the S&P 500 over many years. I believe the next several months may be the period when that objective starts becoming more visible.

The purpose of Mladen Talks Crypto is to transparently document a strategy that I believe can outperform the total crypto market, Bitcoin, and eventually the S&P 500 over a 10+ year horizon. The strategy is intentionally simple. I expect only a handful of allocation changes each year while aiming to lose less during difficult markets and participate well during favorable ones.

Another reason for documenting everything publicly is that I hope one day this track record becomes useful for investors who are new to crypto or for traditional investors looking to diversify into digital assets.

This monthly update is part of that process. Every month I will review portfolio performance, discuss any allocation or rebalancing decisions, and explain how current macro conditions influence my positioning.

And if you decide to subscribe, just know that my motivation to outperform the S&P 500 somehow grows a little stronger with every new subscriber. 🤪

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Portfolio Performance So Far

Since the first public portfolio update, my portfolio has declined 18.8%. That is obviously not the result anyone hopes for, but performance should always be judged relative to the market environment.

Over the same period, Bitcoin declined 31.2%, while the total crypto market fell 30.5%. That means my portfolio experienced a drawdown that was 12.4% smaller than Bitcoin and 11.7% smaller than the broader crypto market.

The comparison with the S&P 500 is less encouraging. While my portfolio is down 18.8%, the S&P 500 has gained 5.6%, leaving me behind by 24.4%. However, crypto remains a highly volatile asset class, so differences like this can widen surprisingly fast or narrow much faster than many investors expect. Time will determine which direction this comparison moves.

Current Allocation and Rebalance Plan

My current portfolio remains straightforward. I hold 50% tokenized gold and 50% Bitcoin.

The last portfolio rebalance was completed on April 23, 2026. It was also my only rebalance this year. I do not trade frequently because my strategy depends on changing market conditions rather than reacting to short-term price movements.

For my existing Gold/BTC allocation, I am watching two important ratio levels. Around 0.08, I would rebalance back to an even 50/50 allocation between Bitcoin and gold. Around 0.0525, I would likely increase gold to 75% of the portfolio while leaving 25% allocated to Bitcoin.

Besides my current positions, I continuously monitor Ethereum and Solana. I am waiting for one of three conditions before considering an allocation. Either financial conditions improve meaningfully, Ethereum falls toward $1,200, or Solana approaches $60. I have not yet finalized the size of those future allocations because the decision will depend on the broader macro environment.

I also monitor smaller projects within those ecosystems and continue following the NEAR ecosystem, which I currently view as one of the more serious blockchain platforms for AI-related applications. That said, I remain far from allocating capital into smaller projects while financial conditions remain restrictive. For that type of risk, I would prefer an environment similar to the period after the large Covid market decline in 2020.

Why My Portfolio Still Looks Defensive

The broader macro picture has not changed enough to justify increasing portfolio risk.

Economic growth continues, but inflation is accelerating faster than growth itself. Both headline CPI and Core CPI continue to move higher, suggesting inflationary pressure has become more widespread across the US economy. Producer prices are also increasing rapidly, which may place additional upward pressure on inflation during the coming months.

At the same time, financial conditions remain relatively loose considering today’s inflation environment. My expectation is that tighter financial conditions are becoming more likely, potentially including additional interest rate increases. If you would like a more detailed explanation, you can read my latest macro analysis here.

Based on this environment, I believe equity markets have already experienced a large share of the upside available under current conditions. Inflation continues moving in the opposite direction from what central banks would prefer, making tighter policy a reasonable expectation. If that happens, crypto markets could face another period of pressure.

That is why I currently hold Bitcoin alongside tokenized gold. Bitcoin has already experienced a substantial decline, making a partial allocation reasonable in my view despite the remaining uncertainty. Gold also serves as protection if inflation continues surprising to the upside while central banks respond with tighter policy. Central bank demand remains another supportive factor over the longer term.

Whether this positioning proves correct or not will only become clear with time. Markets reward adaptation to changing conditions, not attachment to a single narrative.

What’s Next

Thank you for taking the time to read another monthly portfolio update. 🙏

Next week I plan to publish a detailed deep dive explaining my overall investment strategy for the crypto industry. Many readers have asked why I approach the market differently from many traditional crypto investors, and I think it deserves a dedicated article rather than short explanations scattered across different posts.

If that sounds interesting, or if you enjoy these monthly portfolio reviews, consider subscribing to Mladen Talks Crypto. My goal is to document the full investment process as transparently as possible, including the decisions that work well and the ones that do not.

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Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

The irony is that Warsh was supported by President Trump partly because many expected him to be more dovish than Powell. Instead, he sounded more restrictive. 😅

Personally, I think that shift in Fed policy makes sense. The current inflation environment is simply too dangerous to justify an aggressively dovish approach. In this article, I explain what changed, what the new Fed is telling us, how it could affect markets, and how I am positioned.

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The Official Message Was More Restrictive

The press release itself was relatively short, but there were several important messages.

First, the Fed stated that economic activity is expanding at a solid pace despite elevated uncertainty, partly due to the conflict in the Middle East. Productivity growth and capital investment remain strong. Employment growth has kept pace with the labor force, and unemployment has changed little.

I think this statement is largely accurate. Economic activity has slowed compared with previous years, but it is still relatively resilient. The labor market remains healthy, and productivity growth has improved.

Second, the Fed said that inflation remains elevated relative to its 2 percent target and that supply shocks, including energy prices, have contributed significantly to price increases.

I agree on this as well. However, it’s important to emphasise that inflation is no longer only an energy story. Core inflation has also been increasing, which suggests broader inflationary pressures.

Finally, the Fed maintained the interest rate paid on reserve balances at 3.5-3.75%. What stood out to me was not the decision itself, but the complete absence of discussion about imminent rate cuts. It feels as though the Fed finally wants to allow markets to cool.

The Inflation Projections Are the Most Interesting Part

Every Fed meeting includes a Summary of Economic Projections, usually referred to as the SEP. This is where Fed officials publish their expectations for inflation, growth, unemployment, and interest rates.

The most interesting projection was inflation.

The median Fed expectation is that PCE inflation will finish this year at around 3.6%. That sounds reasonable until you realize that PCE inflation is already around 3.8%.

Personally, I struggle to see how inflation falls to 3.6% without first going through a meaningful economic slowdown or some kind of market shock. Producer prices have risen sharply over the past three months, and producer inflation typically reaches consumers with a lag of several months. Unless something changes materially, today’s elevated and rising PPI is likely to put further upward pressure on consumer prices in the months ahead.

At the same time, inflation is no longer concentrated in energy. Core inflation has also been moving higher, so even a resolution to the crisis in the Middle East is unlikely to solve all the problems, contrary to what many people seem to believe.

To me, this means that a decline toward 3.6% is difficult without market weakness and tighter financial conditions. While a significant number of Fed members expect rates to move higher during the second half of the year, I personally think that outcome is becoming almost guaranteed.

The New Fed Wants More Flexibility

One new development is that there will no longer be forward guidance after meetings, and I actually think this is a positive change.

Without forward guidance, there are no guarantees and no explanations from the Fed regarding how it intends to support markets during periods of stress. Until now, investors have often used those assurances to take on more risk because Fed communication reduced much of the perceived downside.

Without that safety net, markets should become somewhat more rational and more cautious. Investors will have to focus more on economic data and less on trying to front-run central bank promises.

Personally, I think this change is also an adaptation to more uncertain times. I do not think the Fed will be able to guarantee as much as it did previously because the economic environment simply does not allow it. I also suspect that removing forward guidance gives the Fed more flexibility if it needs to raise rates in the coming months or if markets experience stress.

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Besides, the Fed announced five new task forces. The first will examine Fed communication and how policy guidance should work in the future. The second will study the Fed’s balance sheet and questions surrounding quantitative easing and quantitative tightening. The third will review the data the Fed relies on when making policy decisions. The fourth will examine employment and productivity trends.

And the fifth will focus on inflation dynamics.

Honestly, I do not know why all these working groups are necessary. I am not sure what they are trying to discover that is not already visible. I do not understand what alpha signal they are looking for when even retail investors can see many of these developments. My impression is that these teams were partly created to demonstrate that something is being done, even if they ultimately change very little.

During his Q&A, Warsh also said that inflation is a choice. In a narrow sense, I think he is right because central banks can eventually suppress inflation by tightening monetary policy sufficiently. But the problem is that doing so in the current environment carries a serious risk of creating an economic crisis.

What I find amusing is the apparent contradiction. The Fed has had a 2 percent inflation target for years and has repeatedly failed to achieve it. At the same time, it acknowledges that inflation remains elevated and even signals that higher interest rates may become necessary. Then it says that inflation is a choice.

If inflation is indeed a choice, then persistent inflation starts to look less like an accident and more like a policy preference constrained by the fear of what aggressive tightening might do to the economy.

My Main Takeaways From This Meeting

It has been interesting to watch these changes.

Although the Fed and Warsh may want investors to feel that something has fundamentally changed, I suspect much less has changed than it appears.

This still looks like the same Federal Reserve to me. Its primary objective remains supporting economic growth, while inflation control appears to be a constraint that is pursued only to the extent that it does not significantly threaten that growth. And between choosing rate cuts or rate hikes, I think there will always be a political bias toward eventually cutting rates when conditions become difficult, regardless of what these working groups conclude.

At the same time, I think the Fed is preparing markets for higher rates. Inflation pressures are slowly moving outside of its comfort zone.

I also think the new Fed understands that a potential crisis may emerge over the coming years. Removing forward guidance feels like preparation for an environment where the Fed simply cannot make as many promises as it previously did.

My Expectations for the Crypto Market

Based on everything above, I currently see two plausible paths for the crypto market.

In the first scenario, risk markets cool before another fundamental leg higher can begin. The trigger could be weaker growth, tighter financial conditions, or simply an exhausted market. If the slowdown becomes severe enough, I would expect the Fed to eventually cut rates aggressively to prevent a deeper economic contraction.

In the second scenario, markets continue grinding higher for some time while inflation accelerates much faster than expected. In that case, I think the Fed would eventually be forced to raise rates further, which would likely lead to a cooling of risk assets, including crypto.

Although the paths are different, they ultimately lead me to the same conclusion. I think another meaningful decline in crypto remains more realistic than an immediate move to new all-time highs. For me, the downside still appears more probable than the upside in the current regime, and that is how I am positioning my portfolio.

How I Am Positioned for the Current Regime

I am currently out of altcoins.

My portfolio consists only of Bitcoin and tokenized gold, and I continue to rebalance between the two depending on conditions.

I am waiting for a cooling of the equity market and what I believe could eventually become a final major decline in crypto. If that happens, I plan to begin building risk-on positions again.

I may be wrong, and markets can always surprise us. But this is the regime I currently see and the way I am adapting to it.

If you enjoy this type of macro and crypto analysis, consider subscribing so you do not miss future updates and portfolio changes. 🍻

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Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

In this update, I will explain why I currently view the U.S. economy as being in a late phase of the business cycle. I will also discuss the main forces driving markets today and the risks I believe investors should pay attention to.

To keep things practical, I will focus on a handful of areas that I believe matter most: economic growth, inflation, financial conditions, and market sentiment. The goal is to make the analysis understandable and useful for retail investors.

If this type of framework helps you think about crypto investing from a different perspective, consider subscribing so you do not miss future updates.

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The Economy Still Looks Healthy

If I had to give a short answer to the question of whether the U.S. economy is growing, slowing, or contracting, my answer would be that it is still growing based on the indicators I follow.

That may sound obvious given that the S&P 500 continues to make new all-time highs. However, I do not use the stock market itself as a proxy for economic growth. Financial markets and the real economy are related, but they are not the same thing. During market bubbles, stock prices can create the impression that economic conditions are stronger than they actually are. The opposite can also happen during recessions, when markets may become significantly more pessimistic than the underlying economy. That is why I prefer to look directly at economic indicators rather than infer economic strength from asset prices alone.

I focus primarily on the U.S. economy because it remains the most important macro driver for the crypto market I invest in. In the coming weeks, I plan to write a separate article explaining why I place so much emphasis on U.S. economic conditions and why I believe they matter more for crypto investors than many realize. If that topic sounds interesting, consider subscribing so you do not miss it.

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The first indicator I’d like to discuss in this post is ISM Manufacturing PMI. It increased to 54 in May from 52.7 the month before. That is the highest reading in four years and suggests manufacturing activity continues to expand at an accelerating pace.

Furthermore, the Industrial Production Index is also consistent with an expansionary environment. It grew by 1.4% year-over-year in April. While that is a respectable number, I would argue that an equity market pushing aggressively toward new all-time highs would be more consistent with index growth closer to 3% or higher. By itself, a relatively modest Industrial Production growth rate is not necessarily a problem. The indicator remains above zero and continues to point toward expansion rather than contraction. However, when economic growth remains relatively modest while stock prices continue to surge, it can be one of several signals that investors should at least consider when evaluating whether valuations are becoming disconnected from underlying economic activity.

The labor market also remains relatively stable. The unemployment rate has held at 4.3% for three consecutive months, although it has been gradually trending higher since mid-2023.

The most interesting data point is Consumer Sentiment. The index improved to 48.9 in June from 44.8 in May. While that is a welcome improvement, the broader picture remains unusual. The index has now spent three consecutive months below 50, something that has not occurred at any point in more than seventy years of available data. At the same time, the S&P 500 continues to reach new all-time highs.

That disconnect between Consumer Sentiment and the S&P 500 deserves attention. Consumers appear to be reporting significant pressure on their finances, while financial markets continue to price in optimism. One indicator alone does not define a market regime, but the growing separation between financial assets and the real economy is not something I view as healthy.

The Inflation Problem Isn’t Going Away

Growth is only one side of the picture. Inflation is where the current environment becomes more concerning.

A growing number of indicators suggest that already elevated inflation is beginning to accelerate again. Current pressures appear to come from both demand and supply, but supply-driven inflation linked to the conflict between the United States and Iran appears to be the stronger force at the moment.

The latest CPI report, released on June 10, showed inflation rising to 4.2% in May from 3.8% in April. Even more notable is the move from 2.4% to 4.2% in only three months. That is a substantial acceleration, one that could trigger tectonic shifts across financial markets if it continues.

Core CPI, which excludes food and energy, also increased from 2.6% to 2.7%. This is an important detail because it suggests inflation is no longer only an energy/war/US vs Iran story. Price pressures appear to be spreading more broadly across the whole economy.

Producer prices tell a similar story. PPI reached 6.5% year-over-year in May, up from 5.7% only one month earlier. Such an acceleration is difficult to ignore. On a monthly basis, producer prices increased by 1.1% in both April and May. To put that into perspective, monthly increases of that magnitude have not been seen since March 2022. Seeing them occur in two consecutive months is even more unusual and suggests that inflation pressures are building rather than fading.

The reason this matters is that producer prices often flow through to consumers with a delay. Businesses can absorb part of those higher costs for a period of time, but eventually many of them are passed on through higher prices. As a result, PPI is often viewed as a leading indicator for CPI, with the effects typically appearing several months later. With CPI already moving higher and producer prices continuing to accelerate, the latest data points toward the risk of further inflation pressure in the months ahead.

Oil remains another important variable. Since the beginning of the conflict in March, WTI crude has struggled to remain below $90 per barrel (currently at around $85 per barrel). Escalating rhetoric isn’t helping either. If progress toward a ceasefire remains absent, investors may begin to reassess the risks surrounding the Strait of Hormuz, potentially pushing prices above $100.

The broader concern is that countries cannot draw down reserves indefinitely. Once reserve levels approach lower thresholds, energy costs may become a much larger issue. Even here in Austria, the government has already outlined a difficult fiscal path for 2027 and 2028 that is expected to include spending cuts. The conflict in the Middle East was presented as one of the main reasons behind the expected pressure.

Neither Loose Nor Restrictive

One encouraging aspect of the current environment is that markets are not showing clear signs of stress.

Financial conditions appear broadly neutral and have remained relatively unchanged for several months. As a result, the current combination of moderate economic growth and accelerating inflation has been allowed to continue without major disruption.

The Federal Funds Rate has remained near 3.65% for an extended period. While that level may appear restrictive when compared with recent years, it does not seem restrictive enough to materially slow the trends we are currently observing.

Liquidity conditions also remain relatively balanced. The amount of money in the system continues to increase, but the pace is nowhere near what investors witnessed during the previous cycle.

That matters because many investors continue to expect a broad altcoin season. Yet the level of liquidity expansion that would typically support such an outcome is currently absent. Given the inflation backdrop, this is not surprising. A major liquidity surge would likely add further pressure to already rising prices.

Why I’m Staying Defensive on Altcoins

Putting everything together, my current conclusion is that we are operating in a late-cycle phase.

The economy is still growing. Equity markets continue to make new all-time highs. Inflation, however, is rising even faster. Historically, that combination tends to appear toward the later stages of an expansion rather than the beginning.

A late-cycle environment is typically the final phase of growth before conditions eventually cool. The difficult part is timing. Nobody knows whether that process takes several months or a couple of weeks.

My assessment is that there is limited room for broad crypto market upside from here, particularly for the type of altcoin season many investors continue to anticipate. As the cycle matures, the reward for taking additional risk tends to shrink. Investors become less willing to hold assets that can experience deep drawdowns. Those conditions are generally associated with the early phase of a business cycle, not the late phase.

Combining that view with the fact that the broader crypto market remains in a downtrend, the case against holding altcoins becomes quite strong from my perspective. There are many ways to define a downtrend, but I try to keep my process as simple as possible. In my framework, a market is in a downtrend when price trades below the 50-week moving average and there are no strong bullish RSI divergences, suggesting that momentum is turning. I deliberately focus on only a small number of technical indicators and combine them with macro and fundamental analysis rather than building overly complex models.

If I were forced to make a twelve-month assessment, my base case would be that we are moving closer to an event that cools equity markets and creates additional pressure on crypto assets. Holding stocks or broad crypto exposure today may therefore involve more risk than many investors currently assume.

However, I do not know what the trigger will be. I can only see that the list of candidates is growing. One possibility is a continued rise in oil prices without any realistic path toward de-escalation. In that scenario, the Federal Reserve could be forced to tighten policy further, potentially triggering a broader reduction in risk-taking across markets.

Time will ultimately determine whether this assessment proves correct. If it turns out to be wrong, I will be here to admit it. Because markets reward adaptation.

Closing Thoughts

Thank you for taking the time to read this month’s analysis.

For readers who are new here, I am a crypto retail investor who has been publicly sharing my investment strategy since December 2025. My goal is not to predict every market move but to provide a different perspective on crypto investing, and openly document how I approach portfolio construction and risk management over the long term.

I would also love to hear your thoughts. Do you agree with the late-cycle interpretation? Do you see different risks or opportunities ahead?

If your view differs from mine, let me know in the comments. Good investment discussions are often more valuable than agreement.

See you in the next one! 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

Today’s topic is the idea that altcoins become good investments simply because they are already down a lot. You often hear some version of: “It is down 90%, so the downside is limited and the upside is huge.”

And while that sounds intuitive, it is also very dangerous.

This topic matters to me because I learned crypto from zero. I made mistakes, held weak positions for too long, and paid tuition to the market. Now I want to share that experience with people who might benefit from it.

If you like this type of content, consider subscribing. It helps me see that people care about these topics and gives me energy to keep writing.

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A 90% Drawdown Is Not a Floor

The market does not know where you bought, and more importantly, it does not care.

If you bought AVAX at $120 and it later trades at $7, no rule says it must return to $120. The all-time high is historical information, not a magnet. There is no gravity pulling a coin back to its previous peak.

Upside potential is not the same as probability.

An influencer can say: “This coin is down 95% and can still do a 20x.” And while that may be true, the definition of “can” is not the same as “probably will.”

Coin A might have 20x upside and a 5% chance of success. Coin B might have 5x upside and a 70% chance of success.

Coin B is the better investment in this example.

Moreover, getting back to an ATH is difficult. A project needs liquidity, adoption, narrative support, market structure and timing. Only a small number manage to do it.

We saw something similar after the dot-com bubble. Most companies from that period failed or never recovered their previous highs. Even Intel only recently surpassed its dot-com-era record after roughly 26 years.

Crypto has its own examples: Axie, LUNA, Harmony, and many others. Some 2021 and 2022 altcoins will probably follow the same path. Emotional attachment makes this harder, which is why it is usually a bad portfolio input.

I learned this the hard way in 2022. I held small and mid-sized projects throughout the bear market because I thought they could not fall much further. AVAX was one of them. From its November 2021 peak to late 2023, it had 4x separate 50% declines without a meaningful recovery and reached roughly a 95% drawdown. Even today, AVAX trades around the high single digits.

I also held QI (BENQI), a liquid staking provider on Avalanche. The losses were painful, but useful. That period forced me to stop guessing and start learning how market regimes actually work.

P.S. I don’t hate the Avalanche ecosystem. Quite the opposite, I still think it’s an outstanding project that the market simply hasn’t been very kind to. I have a lot of respect for it, but I prefer to stay focused on the ecosystems that have at least managed to recover to some extent. When it comes to altcoins, I’m primarily referring to Ethereum and Solana.

Today’s Regime Is Not Built for Easy Altseason

The main reason I am skeptical about a broad altcoin season is that the current macro environment looks very different from the one that supported the last major crypto rally.

After the Covid shock, markets first experienced a large drawdown across risk assets. What followed was an extraordinary expansion of liquidity through QE and fiscal stimulus. At the same time, inflation was initially much less of a constraint for policymakers. Liquidity was growing rapidly, real rates were deeply negative, and investors were pushed further out on the risk curve.

Today’s environment is almost the opposite.

The S&P 500 is already trading near all-time highs rather than coming off a major reset. Liquidity growth exists, but it is modest compared to what we saw during and after the Covid period. Most importantly, inflation remains elevated and has recently started moving higher again. That creates a very different backdrop for risk assets because policymakers have less flexibility to support growth if inflation becomes a larger problem.

The inflation picture is further complicated by geopolitics. Tensions in the Middle East continue to create the risk of supply-driven inflation, particularly through energy markets. If energy prices rise materially due to this conflict, inflation could move higher even if economic growth slows. That is not the type of environment that has historically supported aggressive risk-taking across speculative assets.

My view is that deeper market stress is more likely than a clean altseason before that. That is how I am positioning, and I covered more of that reasoning in the previous article.

That does not mean no altcoin can go up. There are always exceptions. $HYPE is an example of a token that has moved strongly while the broader environment remains difficult.

But being concentrated in one smaller coin because it “can go up” is a different thing from having a repeatable process.

Separate Possibility From Probability

When you see posts claiming that a coin is an obvious opportunity because it is down 90% or 95%, try to separate possibility from probability.

Yes, almost any coin can recover. Some can even produce extraordinary returns from deeply depressed levels. The problem is that investors often stop their analysis there. They focus on what is possible and ignore how likely it is.

Always do your own analysis, or learn from several sources that disagree with each other. The goal is to build your own framework.

Also, spending less time on noisy social media and more time on Substack probably does not hurt. 😎

Final Thoughts

Thanks for reading.

I am curious which crypto investor habits or influencer comments annoy you the most?

There is no shortage of material, so this series should not suffer from supply issues.

For anyone new here, I am a retail investor writing publicly about my portfolio management and the lessons I learn along the way. My goal is to achieve a 30% CAGR in crypto over the next 10 years. I use a different approach from what is usually found on social platforms, and I try to explain the rationale behind every major decision.

You should also take my content with caution. Do not outsource your thinking to me or anyone else.

If this type of post is useful, subscribe and let me know. That helps me decide whether to continue this series.

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Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

In this issue, I’ll break down what the latest growth and inflation indicators currently suggest, how I interpret the broader business cycle regime, what this could mean for crypto markets, and how I’m personally positioning my portfolio inside these conditions.

If you enjoy this type of macro and crypto analysis, feel free to subscribe to Mladen Talks Crypto. My goal is to help retail investors understand conditions, and not just chase narratives.

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Labor Markets Still Look Stable

As mentioned above, the US unemployment rate remained unchanged at 4.3% in April, exactly the same level as the month before.

At first glance, that still looks relatively healthy. Historically speaking, a 4.3% unemployment rate is not the kind of number that immediately signals a recession or a severe economic slowdown. However, it is worth noting that the broader trend has been moving gradually higher since March 2023.

More importantly, low unemployment alone does not guarantee that everything is fine beneath the surface. Before the 2008 financial crisis, unemployment was also relatively low, reaching just 4.7% near the peak of the cycle.

That does not mean a crisis is around the corner today. It simply means that labor market data is only one piece of a much larger puzzle.

To understand the current macro environment properly, we also need to examine what growth and inflation indicators are telling us.

Growth Is Slow, and Inflation is Hot.

The unemployment rate is a useful starting point, but I generally prefer to build a broader picture using indicators that measure both economic growth and inflation dynamics.

Starting with growth, Industrial Production currently stands at 1.4% YoY and continues to trend gradually higher. That suggests the economy is still expanding. The problem is that a 1.4% growth rate does not come close to justifying the aggressive rise we have seen in equity markets over the last year. If anything, it suggests that financial markets may be pricing in a much stronger economy than the one we actually have.

Consumer Sentiment paints an even stranger picture. The index currently sits at 49.8, the lowest reading in its 70-year history, while the S&P 500 continues to print new all-time highs. In my view, this is a sign that financial markets have become increasingly disconnected from consumers. That is usually not a sign of a healthy expansion. It is more often a characteristic of speculative excess.

At the same time, ISM Manufacturing remains at 52.7 and has been trending higher since mid-2023. Combined with Industrial Production, it suggests that the economy is still growing, even if that growth remains relatively modest.

So regardless of whether this eventually proves to be a bubble or not, the data still points to an economy that remains in a growth phase.

Inflation, however, tells its own story.

Producer Price Inflation jumped to 6.0% YoY in April from 4.3% only one month earlier. The monthly acceleration was one of the strongest since the Covid period. Historically, large increases in producer prices often show up later in consumer inflation as companies pass higher costs on to households.

WTI crude oil remains around $91 per barrel. While headlines continue to focus on a potential agreement between the United States and Iran, there is still little clarity regarding timing or implementation. Until that situation is resolved, I remain cautious about the inflationary pressure coming from energy markets.

Core CPI remained at 2.6%, which still looks manageable on its own. The bigger concern is that headline CPI already jumped from 2.4% in February to 3.8% only two months later. Given the recent surge in PPI, there is a reasonable chance that inflation pressure remains elevated in the coming months.

The gap between Core CPI and headline CPI also suggests that supply-side inflation remains the dominant force right now, which is not surprising given the sharp rise in energy prices.

Taken together, the data suggests that inflation is accelerating much faster than economic growth. That is the main reason why I currently view the environment as a late-cycle expansion with increasingly visible bubble characteristics.

A Late-Cycle Environment With Bubble Characteristics

Identifying the business cycle is only part of the process. The next step is understanding financial conditions, because financial conditions often determine how long a particular regime can continue.

If I had to describe current financial conditions in one sentence, I would say they are still relatively loose, although probably not as loose as many investors believe.

The reason is simple. Inflation is accelerating rapidly, and that is rarely sustainable for long periods of time. If inflation continues moving higher, it becomes increasingly difficult for the Federal Reserve to remain passive. At some point, policymakers are likely to face pressure to respond more aggressively.

Investors seem to recognize the current uncertainty.

The US Dollar Index has largely remained trapped between 95 and 100 since mid-2025. Real yields have also spent much of that period moving sideways. In other words, markets still cannot agree on where the economy is heading next.

If financial conditions do not tighten at some point, I see two realistic paths forward.

The first is that excess speculation continues building until it eventually breaks under its own weight, similar to what happened during previous market bubbles such as 2000.

The second is that inflation continues accelerating, forcing the Fed to raise rates more aggressively, which would eventually cool both the economy and financial markets.

Neither outcome is particularly friendly for risk assets.

What makes the situation even more interesting is that the premium investors receive for taking equity risk continues to shrink. In fact, 10-year Treasury bonds are already offering a more attractive average cash yield than the earnings yield available from the S&P 500.

To me, that suggests some form of cooling is increasingly necessary, and the question is not whether markets eventually cool down.

The question is how that cooling process unfolds, and that is exactly what drives the way I position my portfolio today.

Why My Portfolio Looks Defensive

Based on the framework outlined above, I currently view high-beta assets, particularly altcoins, as a risky place to be.

As of today, my portfolio is allocated 50% to tokenized gold and 50% to Bitcoin. My last rebalance took place in April.

The reasoning is fairly straightforward. Gold has historically performed well during periods of elevated inflation and tends to be more resilient if markets run into trouble. Bitcoin, on the other hand, has already experienced a significant correction and could still have room for another move higher in the coming weeks within a broader downtrend.

Altcoins are where I remain cautious. Personally, I think it is still too early for meaningful exposure unless we see another large leg down from current levels.

Since my first public portfolio update in late August, the portfolio is down 10.7%, compared to Bitcoin’s decline of 16.1% over the same period. My first public portfolio breakdown can still be found here.

To become more risk-aggressive, I would likely need to see another major drawdown in risk assets. The projects I am watching most closely are Solana, Ethereum, and potentially a few others such as NEAR Protocol. If those opportunities appear, I’ll share them with subscribers, along with any portfolio changes I make.

To become more defensive, I would actually need to see Bitcoin rally significantly from current levels. At this stage, I suspect any major upside move would be relatively short-lived, which could justify reducing Bitcoin exposure and increasing my allocation to gold.

But let me ask you:

I’d be interested to hear your reasoning in the comments.

Closing Words

One of the reasons I focus so heavily on macro conditions is because crypto markets rarely move in isolation for long periods of time.

I’m not trying to predict exact market outcomes. I’m simply trying to understand what type of regime currently exists, how markets historically behaved in similar conditions, and how I want to position myself inside that uncertainty as a retail investor.

That is also the broader goal of Mladen Talks Crypto. I want this newsletter to help retail investors think more clearly about inflation, business cycles, liquidity, market structure, and crypto positioning without relying entirely on narratives or social media sentiment. Crypto markets often generate strong convictions very quickly. Conditions usually move more slowly.

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If you enjoyed this issue, feel free to subscribe, leave a comment, and share your own positioning thoughts. I read all comments and genuinely enjoy the discussions that happen below these posts. 🍻

Disclaimer: The content on Mladen Talks Crypto is for educational and informational purposes only. It is not financial advice, and I am not a financial advisor, broker-dealer, or registered investment advisor (RIA). Investing in cryptocurrencies and digital assets involves significant risk, and past performance is not indicative of future results. You are solely responsible for your own investment decisions and outcomes. Read the full Disclaimer here.

You study Bitcoin dominance. You debate whether altcoins are entering accumulation or distribution. You think about liquidity, macro cycles, and market structure.

But here is the uncomfortable question.

Are you positioning your kids too?

Not with an inheritance. Not with a college fund alone. I mean mentally. Are you preparing them to manage the financial world they are growing up in?

Because that world is not your parents’ world. It is not even yours.

Your child’s first exposure to investing might not be 401k. It might be a TikTok explaining how someone turned $200 into $20,000 trading meme coins. Their first experience with credit might be Buy Now Pay Later at checkout. Their first lesson about wealth might be watching influencers make money from attention in real time.

If that seems overstated, consider how many adults still don’t grasp interest rates.

Financial literacy is not about raising tiny portfolio managers. It is about raising adults who are not financially fragile.

There is a difference.

Most of us learned about money the hard way. We learned when we over drafted. When we signed student loans without understanding compounding. When we panicked, we sold it. When we FOMO’d. When we realize income is not the same as wealth.

We learned through mistakes.

Your kids do not need to learn everything through mistakes.

You already understand volatility. You have watched markets move hard based on narratives, liquidity, and emotion. You know price and value are not the same thing. You know hype fades. You know risk management feels boring until it saves you.

Those lessons apply far beyond crypto.

When you teach a teenager that a 10x return usually comes with heavy risk, you are also teaching them how to think about decisions. When you explain why you did not chase a pump, you are modeling discipline. When you talk through a drawdown calmly, you show them how to handle pressure.

That is financial literacy in real life.

Here is something else most people do not say out loud. The biggest risk in markets is rarely the chart. It is behavior.

People do not blow up because volatility exists. They blow up because emotion takes over.

If you understand that, you already know why early exposure matters.

Most adults experience that cycle for the first time with real money on the line. That is when the lesson is expensive.

But a teenager can learn the same pattern in conversation. They can understand that euphoria clouds judgment. That panic makes people sell bottoms. That patience often feels uncomfortable.

You are not teaching them how to trade. You are teaching them how people behave under pressure.

And that applies everywhere.

Financial literacy reduces anxiety because clarity reduces fear.

Adults who do not understand money often avoid it. They avoid looking at statements. They delay decisions. They carry quiet stress around debt. They mistake income for security.

Clarity changes that.

Kids also learn by watching you.

If they see you panicking at every red candle, they learn anxiety.
If they see you stick to a plan, they learn discipline.
If they see you admit mistakes, they learn maturity.

It is funny because it is true. Your kids hear more than you think. If they hear you talk about markets all the time, they are already forming ideas about risk and money.

The question is whether you are guiding that learning.

Now let us talk about time.

If your child understands investing at 18 instead of 30, that is not just a twelve-year head start. It is decades of better decisions.

And it is not only about starting early. It is about starting with structure.

The difference is not magic returns. It is better decisions made for longer.

You already understand this in markets. Process matters. Discipline matters. Time matters.

Now think about legacy.

Many people focus on building wealth. Fewer focus on transferring understanding.

And history shows what happens when money transfers without knowledge.

If you build wealth but do not transfer financial competence, you are handing your child opportunity without an instruction manual.

Money without understanding can disappear fast. We have seen it in every cycle. Fast gains. Faster losses. Sudden wealth followed by bad decisions.

Teaching finance early is not about turning your child into a trader. It is about giving them judgment.

That matters even more in today’s world.

Your kids are growing up in an attention economy. They see followers and assume wealth. They see lifestyles and assume stability. They see visibility and assume ownership.

But attention is rented.

Assets are owned.

Which brings us to a conversation that might happen one day.

It is a joke. But it is also realistic.

You can build a strong portfolio and still leave your kids unprepared to manage it.

Financial literacy teaches more than investing. It teaches patience. It teaches trade-offs. It teaches how to evaluate risk before jumping in.

Teaching financial literacy is really teaching how to think under uncertainty.

And uncertainty is not going away.

You already spend hours thinking about positioning. You rebalance. You manage downside. You think long term. You adjust when data changes.

The real question is whether you are applying that same level of thought to your kids’ financial mindset.

Because the most asymmetrical bet you can make is not a token.

It is early financial understanding.

That return does not depend on market timing. It depends on you.

One of the reasons I wanted to publish this guest post is because I think financial literacy inside families is still massively underestimated. Studies show that around 70% of wealthy families lose their wealth by the second generation, and roughly 90% by the third. Building wealth is clearly not enough. Transferring knowledge matters just as much.

As a father of three small daughters, I think about this a lot myself. I want my kids to grow up with better financial understanding than I had, and honestly, I feel a huge responsibility not to get that wrong.

That is why I think Madam Finance deserves attention, especially if you are a retail investor with kids or someone who wants to prepare their family for a more complex financial future.

Subscribe to Madam Finance

Inflation is moving higher, driven by energy, while rate cuts are becoming less likely. At the same time, the geopolitical situation adds another layer of uncertainty that the market can’t easily price in.

This creates a difficult setup for crypto. Not necessarily bearish in a straight line, but far from the conditions that usually support broad risk-taking.

In this post, I’ll break down what the latest FOMC meeting tells us, how current financial conditions are evolving, and what that means for crypto positioning.

📬 In this issue:

1. What the latest Fed decision really means

2. How current conditions shape the macro regime

3. How I’m positioned in this environment

FOMC Meeting

The latest FOMC meeting on 29.04. confirmed what the market was already starting to price in. The Fed decided to keep rates unchanged at 3.65% for the third consecutive time. No cuts, no hikes. But the reasoning behind it is more important than the decision itself.

In his last press conference as the Chairman of the Fed, Jerome Powell acknowledged that the US economy is still expanding. At the same time, he pointed out that inflation is moving higher again, largely due to rising energy prices linked to geopolitical tensions in the Middle East.

This creates a difficult position for the Fed. Rates are relatively high, but not high enough to bring inflation back toward target. At the same time, cutting rates would risk accelerating inflation further.

In previous cycles, rate pauses often came before easing. But this time, the constraint is different. Inflation is not purely demand-driven. It is increasingly supply-driven, which limits how aggressively the Fed can respond.

The result is a regime where liquidity cannot expand in a meaningful way. For crypto, this matters directly. Broad altcoin rallies typically require expanding liquidity and improving financial conditions. When rates stay elevated and inflation remains a concern, that setup doesn’t materialize.

This is why the current environment is not a natural setup for high-beta assets.

The Whole Picture (Aside From the Fed)

When you look beyond the Fed decision itself, the broader picture becomes clearer.

Unemployment remains relatively stable around 4.3%, which gives the Fed room to stay patient. There is no immediate pressure from the labor market that would force rate cuts.

At the same time, inflation metrics are moving in the opposite direction. Core PCE is still around 3%, which is already above target even without energy effects. CPI has moved higher as well, driven largely by oil prices. This combination suggests that inflation pressure is not easing, but gradually building.

Real interest rates remain positive, around 0.7%, and the downtrend is weak. This is important because it means investors are still being rewarded for holding safer assets. That reduces the incentive to move capital into higher-risk assets like altcoins.

The DXY has been trading in a relatively tight range between 95 and 100 for an extended period. This kind of range usually signals indecision. A stronger dollar typically pressures risk assets, while a weaker dollar supports them. The fact that DXY is stuck in this range suggests that the market has not yet committed to either a clear risk-on or risk-off direction.

Polymarket expectations reinforce this uncertainty. The probability that the Fed will not cut rates at all this year has increased to around 57%, up from 42% last month.

At the same time, the market assigns only about a 30% chance that the US–Iran conflict will be resolved by the end of June. This indicates that investors are gradually pricing in a more prolonged period of elevated inflation risk.

When you combine these signals, the current regime points toward a risk of stagflation. Inflation is rising, while growth faces pressure.

Historically, this is not an environment that supports broad risk expansion. Liquidity tends to grow slowly and without momentum, and capital allocation becomes more selective.

The biggest risk right now is that inflation continues to rise while policy remains constrained. In that scenario, both growth and risk assets struggle at the same time.

My Positioning ATM

Given this setup, my current allocation is split between 50% BTC and 50% gold.

I made that transition on April 23rd, when the BTC/Gold ratio reached the 0.06 level. This wasn’t a price-driven decision, but a regime-driven one.

In an environment where inflation risk is rising and liquidity is not expanding meaningfully, I prefer assets that are more resilient to uncertainty. Bitcoin still carries risk, but relative to altcoins, it tends to hold better in constrained conditions. Gold, on the other hand, benefits directly from inflation-driven narratives.

At the same time, I’m still actively monitoring altcoins, especially Solana and Ethereum. If they reach levels that I consider structurally attractive, I’m open to allocating part of the portfolio, even if the broader regime hasn’t fully shifted.

What would change my positioning is a clear improvement in the macro environment. That would likely require a de-escalation of the conflict, a decline in oil prices, and a more stable inflation outlook.

Until then, I remain cautious.

Let me know how you see it. 🍻

Closing Words

All of this comes from tracking market conditions in a structured way.

I’m a retail investor, just like most of you, and also a co-founder of Denomos. On the platform, we track key macro indicators such as liquidity, real interest rates, inflation, and many others that help us understand the current regime.

The goal is not to predict the future, but to better understand the environment we are operating in.

If you find this type of analysis useful, consider subscribing, hitting the ❤️ button, or sharing the post. It helps this newsletter reach other retail investors trying to navigate the same questions.

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And feel free to leave a comment with your thoughts or questions. 🍻

This is not financial advice.

I see these two technologies as among the most important developments for the next 10–20 years, primarily because of how well they fit together. In an agent-driven world, where software acts on behalf of users, you need financial rails that are always online, low-cost, and permissionless. Today, blockchains are one of the few systems that meet those conditions.

This post would not be possible without Vini from 「thecoding」, who co-authored it. He is deeply involved in the NEAR ecosystem and runs a validator, which gives him a practical perspective beyond theory.

In this article, you will find a breakdown of what NEAR Protocol is, how it is positioned around AI, and how it compares to other “AI” crypto projects.

If you want to follow this space more closely, consider subscribing for future updates.

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What is NEAR and Why It Is Positioned for AI

NEAR is a general-purpose blockchain, similar in category to Ethereum or Solana, but with one key difference. It was built with AI use cases in mind from the beginning.

The team originally started as an AI company in 2017. They transitioned to building a blockchain in 2018 because they needed infrastructure to support fast, low-cost, and reliable transactions for AI-related systems. That origin still shapes the design today.

One of the key differences with NEAR Protocol is how naturally AI agents can interact with the network. On many blockchains, agents have to rely on external tools and libraries that weren’t specifically designed for that environment. It’s a bit like trying to use a general-purpose app for a very specific task. It works, but not perfectly. This added layer slows things down and increases the chances of errors.

NEAR takes a different approach. Instead of forcing developers to adapt generic solutions, it provides purpose-built tools designed specifically for AI agents. One example is the “Shade Agent stack,” which acts as a native toolbox. With it, agents can directly interact with smart contracts and execute transactions without needing complex workarounds. In simple terms, NEAR reduces the distance between AI agents and the blockchain itself. The result is a smoother, more reliable experience, where agents can operate faster, with less overhead and fewer points of failure.

Another important part of the ecosystem is NEAR AI Cloud. It’s a platform where developers and companies can run AI models, deploy agents, and manage how those agents interact with different services. Instead of stitching together multiple tools, everything can be handled in one place. For example, developers can deploy agents like IronClaw—an open-source, security-focused alternative to OpenClaw—and run them directly within the environment. Payments for usage, such as API calls or compute resources, can also be processed seamlessly through the network.

One of the key ideas behind NEAR AI Cloud is privacy. The system uses secure environments designed to keep data protected while it’s being processed. In simple terms, sensitive information stays confidential, even while it’s actively in use. At the same time, interactions can be verified using cryptography, which means you can trust that everything happened exactly as intended without exposing the underlying data.

Another key piece of NEAR’s approach to AI is something called chain abstraction. In most blockchain environments, interacting across different networks can quickly become complicated. Users have to think about which chain they’re on, how to move assets between networks, and which standards or tools to use. It’s a fragmented experience that adds unnecessary complexity.

Chain abstraction removes that burden. Instead of dealing with multiple blockchains, users and applications can interact with assets and perform actions as if everything exists within a single, unified system. The underlying complexity is still there but it’s handled behind the scenes.

NEAR implements chain abstraction through products like NEAR Intents and Chain Signatures. Today, more than 35 major blockchain projects are already using or integrating parts of this stack. If you look at the top 50 by market cap, a large portion is either already connected or in the process of doing so. This allows users and AI agents to move assets across NEAR, Bitcoin, Ethereum, Solana, XRP, Cardano, Avalanche, and many other networks without dealing with the usual friction. No manual bridging, less exposure to errors, and fewer steps.

For the AI use case, this is especially relevant. Agents will not operate on a single chain. They will need to interact across multiple systems, execute transactions, and coordinate actions. Without abstraction, that process becomes complex and inefficient. NEAR’s approach simplifies that layer, which makes it more suitable for an environment where machines, not just humans, are interacting with the system.

Moreover, from a performance perspective, NEAR combines low fees and fast finality.

|Chain | Average Fees | Transaction Finality |

|-------------|------------------|----------------------|

| NEAR | <$0.01 | ~1–2s |

| Ethereum | ~$0.1–$20+ | ~12–15 min |

| Solana | <$0.001 | ~0.4s + ~13s |

| Avalanche | <$0.05 | ~1–2s |

| Cardano | ~$0.1 | ~2–5 min |

This matters for AI agents. They need fast execution and low cost to operate efficiently.

Why Decentralized AI Matters

Using AI today often comes down to a trade-off between convenience and control.

Centralized systems like ChatGPT, Gemini, or Claude are easy to use, but they rely on collecting and processing user data. That data can be used to improve models, but it also introduces risks. Data leaks, misuse, or lack of transparency are part of that trade-off.

Real-world examples highlight why this trade-off matters. In 2023, engineers at Samsung unintentionally uploaded sensitive internal code to ChatGPT, exposing proprietary information through a public AI system. While this was not a malicious act, it showed how easily confidential data can leave controlled environments when using centralized AI tools.

For everyday users, the risks may seem less obvious, but they follow the same pattern. Personal conversations, business ideas, or sensitive details shared with AI systems can be stored, processed, or used in ways that are not fully transparent.

Decentralized AI approaches this differently. The concept of “User-Owned AI” means that the user controls their data and interactions. Instead of relying on a centralized provider, the system ensures that inputs and outputs remain private and verifiable.

NEAR implements this through products like NEAR AI Cloud (as explained above) and Private Chat.

Private Chat works similarly to ChatGPT from a user perspective. You interact with an AI model through a simple interface. The difference is in what happens under the hood. You can choose which model you interact with, and your data remains protected through the infrastructure.

This reduces the risk of hidden manipulation or unintended data exposure.

For retail users, the difference may not seem critical at first. But as AI becomes more integrated into daily decisions, the question of who controls the data becomes more relevant.

The Current Ecosystem on NEAR

NEAR’s ecosystem already shows signs of real-world usage, which is often missing in early-stage narratives.

One of the most notable examples is Kai-Ching. It is part of the Cosmose AI ecosystem and functions as a reward-based currency within shopping applications like KaiKai. Users earn tokens through engagement, which can be used within the platform.

While it is not positioned as a crypto-native app, it runs on NEAR infrastructure and contributes to network activity. This has helped NEAR reach around 46 million monthly active users, placing it among the most used networks.

Another important component of its ecosystem is NEAR Intents, as explained above in the text. It has already generated significant volume, with billions processed and hundreds of thousands of active users.

Beyond that, the ecosystem includes wallets such as HOT and Meteor, DeFi platforms like Rhea Finance, and staking solutions like Meta Pool.

The common theme is usability. Many of these tools aim to reduce complexity for the end user.

AI Crypto Projects and How They Differ

NEAR is not the only project operating in the AI/crypto space. But the differences between them are often misunderstood.

Bittensor focuses on decentralized intelligence production. It creates a network where participants contribute computing power and models, forming a distributed system that generates AI outputs.

NEAR, on the other hand, focuses on infrastructure. It provides the environment where AI-powered applications can be built and used.

FET/ASI represents another layer. It focuses on autonomous agents that can perform tasks such as logistics, trading, or coordination between systems.

These approaches are not mutually exclusive. A simple way to understand the relationship is through roles. NEAR acts as infrastructure, Bittensor provides intelligence, and FET builds agents that use that intelligence. For example, an AI agent could use Bittensor to generate decisions, execute actions through NEAR, and operate as part of a broader system designed with FET tools.

Rather than competing directly, these systems can be combined.

NEAR Tokenomics and Value for Holders

NEAR’s tokenomics are structured to reduce long-term supply pressure.

In 2025, emissions were reduced from 5% to 2.5%, lowering inflation. At the same time, transaction fees are partially or fully burned.

All fees from native transactions are burned, and a large portion of smart contract fees are also removed from circulation. This introduces a deflationary component.

Additionally, part of the revenue from NEAR Intents is used to buy back NEAR tokens, further reducing supply.

For holders, staking provides another layer of participation. By staking NEAR, users contribute to network security and earn rewards, currently around 4.5% APY.

Vini runs a validator at thecoding.pool.near, where users can delegate their tokens. The process includes a short unbonding period, and rewards are compounded regularly.

Beyond staking, NEAR can be used in DeFi or governance, depending on the user’s strategy.

Closing Words

Special thanks to Vini for contributing to this article. 🍻

He has been active in the crypto space since 2020 and focuses on topics such as AI, privacy, and open-source systems. He also runs a NEAR validator and contributes directly to the ecosystem.

If you are interested in NEAR or AI-related developments in crypto, following his work is a good way to stay informed.

You can also delegate to his validator if you choose to participate in staking (thecoding.pool.near, with over Ⓝ210K staked delegations).

After going through this analysis, my conviction is gradually increasing that NEAR is a high-quality project with strong fundamentals behind it. I’ve started actively thinking about allocating to it once market conditions become more favorable for altcoins. As always, the focus of this newsletter is identifying those regime shifts. 💪

If you have any questions or topics you would like us to explore further, feel free to leave a comment under the post. Vini and I will use that feedback to improve and expand future updates on NEAR.

In the next posts from this series, I’ll also cover projects like Bittensor and the Artificial Superintelligence Alliance (ASI), to build a broader view of the AI–crypto space.

Thank you for reading.

This is not financial advice.

See you soon! 🍻

The immediate question is not just geopolitical but also economic. This type of disruption introduces a risk that extends far beyond the region, primarily through energy markets. If the situation persists, the probability of a broader financial crisis increases due to both rising oil prices and reduced availability of key resources.

For crypto, this is not a neutral development. The environment created by supply shocks tends to affect liquidity, which remains a core driver for the broader market.

This post breaks down what is happening, why it matters, and how it may impact altcoins under current conditions.

A Critical Chokepoint for Global Resources

Before going further, a brief overview is useful. This is not a deep technical breakdown, but enough context to understand why this situation matters.

The Strait of Hormuz is the most important oil chokepoint globally. Roughly 20% of total global oil consumption flows through it. A significant portion of that comes from Saudi Arabia, accounting for more than one third of that volume, while Iranian oil represents a bit over 10%. Most of this oil is directed toward Asian markets, while Europe and the US rely more on alternative routes.

The impact extends beyond oil. Qatar, for example, produces around one third of the world’s helium as a byproduct of LNG processing. Disruptions here affect semiconductor production and AI-related infrastructure, where helium is critical for cooling systems. This creates indirect pressure on the technology sector.

Fertilizers are another channel. Between 20% and 30% of global maritime fertilizer transport passes through Hormuz. Disruptions here affect agricultural output in regions such as India, Brazil, China, the US, and Europe. This introduces upward pressure on food prices.

Petrochemicals follow a similar pattern. The Gulf exports over 40% of global polyethylene and large volumes of other chemical inputs. Reduced supply leads to higher costs across packaging, textiles, automotive, and electronics production.

Most developed economies maintain strategic reserves that can cover roughly three to four months of oil demand. Less developed countries typically hold significantly lower reserves, making them more sensitive to immediate disruptions.

According to the consensus of economists and analysts in 2026, oil prices above $120–130 per barrel begin to create broader economic strain. Sustained levels in the $140–150 range increase the probability of a global recession, especially if maintained over several months.

When Inflation Comes Without Liquidity

Rising oil prices translate directly into higher costs across the economy. Transportation becomes more expensive, production costs increase, and consumer prices follow. This is supply-driven inflation.

In practical terms, incomes do not adjust at the same pace. If fuel, food, and essential goods become more expensive while wages remain relatively stable, purchasing power declines. That typically reduces discretionary spending and limits capital available for investment.

This creates a stagflationary tendency. Growth slows while inflation remains elevated.

For crypto, this type of environment is structurally challenging. The broader market depends on liquidity, which is more closely tied to demand-driven inflation. When inflation is driven by supply constraints, central banks tend to avoid easing. In many cases, they tighten policy further to prevent inflation from becoming embedded.

That response works against the conditions required for risk assets to perform. Without expanding liquidity, high-beta segments of crypto, particularly altcoins, tend to struggle. Most crypto assets still rely on liquidity expansion rather than organic cash flow, which makes them sensitive to this shift in regime.

Two Paths Depend on Energy and Policy

Current market expectations reflect uncertainty around how this situation resolves. On Polymarket, there is a 74% probability assigned to oil prices falling below $85 by the end of June. This suggests that many participants expect the conflict to stabilize or partially resolve.

However, there are a few possible outcomes.

In a negative scenario for crypto, supply-driven inflation persists. Oil remains elevated, inflation stays high, and central banks are forced to maintain or increase rates. This limits liquidity and creates pressure on high-beta assets. A more extreme version involves a financial crisis emerging before policy can adjust.

In a more constructive scenario, the conflict de-escalates. Oil prices normalize, inflation moves lower, and central banks regain flexibility. In that environment, liquidity can expand again, which tends to support risk assets, including altcoins.

At this stage, both paths remain possible. The difference lies in how long the disruption lasts and how quickly energy markets stabilize.

I will continue to track these developments and adjust my view as conditions evolve (subscribe for a weekly update!).

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How I Am Positioned Right Now

My main portfolio remains 100% allocated to Bitcoin. This is not a short-term view based on price, but a reflection of how I see the current regime.

In an environment where inflation risk is rising, driven largely by supply shocks, and where central banks have limited room to ease, the conditions are not supportive for broad risk-taking. Liquidity is unlikely to expand in a meaningful way under these constraints, and that is a key requirement for most altcoins to perform.

Because of that, I see Bitcoin as a more resilient position relative to the rest of the market. It is still a risk asset, but in periods of uncertainty, capital tends to concentrate rather than disperse.

At the same time, I am actively considering reallocating part of the portfolio into gold. Gold has corrected recently, while the probability of a prolonged conflict remains elevated. I am currently monitoring the BTC/Gold ratio and looking for a move toward the 0.06 level before making that decision.

If the situation resolves faster than expected, that may create a better setup for altcoins. Until then, I prefer to stay conservative.

To be clear, some altcoins will outperform Bitcoin in this market environment. However, that outcome is currently more selective than broad, and it can be challenging to identify them consistently.

Closing Words

I write weekly about macro conditions and how they affect the crypto market.

The focus is on regimes. Liquidity, inflation, growth, and how those variables shape risk-on and risk-off environments.

I also share how I position my own portfolio based on those conditions.

If this type of analysis is useful to you, feel free to subscribe and follow along. 🍻

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And as always, this is not financial advice.

See you soon.

Inflation is not falling despite relatively high interest rates, while new risks, particularly from energy markets, are starting to build on top of that.

For crypto, this type of environment tends to narrow the opportunity set rather than expand it.

In this post, I break down what the latest inflation data actually tells us, how other indicators confirm or contradict that picture, and how I’m positioning in crypto as a result.

📬 In this issue:

1. What CPI and PCE are signaling right now

2. Whether other indicators confirm that signal

3. What this means for the current crypto regime

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Let’s get into the data.

Inflation Remains Elevated and Starts Re-Accelerating

In early April, we received two key data points. PCE for February and CPI for March. Both show that inflation is not moving toward the 2% target in a meaningful way.

PCE increased by 0.4% month-over-month and is up 2.8% year-over-year. Core PCE, which is more relevant for policy, also rose 0.4% monthly and sits at 3% YoY. What stands out more is the longer trend. Core PCE has been stuck in the 2.6% to 3% range for roughly two years.

CPI for March confirms the same direction, but with more acceleration. Headline CPI is now at 3.3% YoY, a 0.9% increase compared to the previous month (which is huge!!!). A large part of this move is tied to energy prices, which have been rising since the beginning of the US/Israel-Iran conflict. Core CPI also moved higher, from 2.4% to 2.6%.

This creates a specific type of environment. Inflation is not volatile in a downward direction. It is stable at levels above target, with signs of re-acceleration.

Compared to past cycles, this resembles periods where inflation becomes persistent rather than transitory. Even with relatively restrictive rates, price pressure does not fully normalize.

Energy Pressure Builds While Inflation Indicators Diverge

Beyond CPI and PCE, other inflation inputs point in a similar direction, although not always with the same intensity.

On the supply side, oil prices are currently in the $95–100 range. That is already elevated, and the ongoing situation between the US and Iran does not suggest relief in the near term. Each additional disruption increases the probability of further energy-driven inflation.

On the demand side, indicators such as Core PCE and pricing components in surveys are also showing persistence. The signal is less sharp than on the supply side, but it still points toward underlying price pressure that is not fully contained.

Breakeven inflation sits around 2.3% and with an uptrend potential, which implies that investors expect inflation to remain above the Fed’s target over the coming years.

The Denomos Inflation Index tracks how price pressures evolve beyond headline data, including expectations and leading inputs. The current value is -1.3 on a scale from -50 to +50, which still leans slightly toward a neutral setup within an uptrend since mid-2023.

However, we can observe a divergence between the Financial Conditions Index and the Inflation Index. The Inflation Index remains in neutral territory and in a slow uptrend, while the Financial Conditions Index has been loosening at a faster pace for some time. Historically, such gaps tend to resolve with inflation moving higher in the coming months, which further confirms the direction we are heading.

Inflation Risk Limits Policy and Market Expansion

The current regime is defined by persistent inflation, rising energy risk, and relatively loose financial conditions compared to the state of the economy. When inflation remains elevated and financial conditions are not restrictive enough, the typical outcome is further inflation pressure in subsequent months.

Moreover, the current geopolitical situation acts as an additional catalyst for the high-inflation risk. In such an environment, policy flexibility is limited, and rate cuts become less likely.

Polymarket expectations align with this view. More than 40% of participants expect no rate cuts this year, while over 80% assign a high probability to inflation reaching the 3.5% to 4% range by year-end.

For the crypto market, this creates a constrained setup. Without easing, liquidity does not expand meaningfully and without expanding liquidity, most altcoins struggle to sustain upward moves.

But there is also a secondary risk. If supply-driven inflation continues to rise (which is likely), central banks may be forced to tighten further and more decisively, as alternative approaches by the Fed have historically proven ineffective. This scenario would also be negative for altcoins in the short to mid-term.

In fact, this scenario may be the most realistic outcome. Financial conditions appear too loose for the current environment, while inflation pressures are building. So, to be completely honest, we shouldn’t be waiting for rate cuts. We should be preparing for potential rate hikes.

Given all of the above, I strongly believe the environment remains challenging for broad crypto exposure.

Positioning for a Constrained Crypto Environment

My current allocation remains unchanged. 100% BTC, with plans to potentially reallocate part of the capital into gold.

Since my first post where I started tracking performance publicly, the portfolio is down approximately 16–17% (you can see the starting point here)

The reasoning behind this positioning is based on the current regime. The risk of holding altcoins remains elevated. In environments like this, that phase can last longer than expected, and drawdowns can extend further than most anticipate.

I also believe that altcoins still have room to decline from current levels. Without a clear shift in inflation and policy expectations, there is little structural support for a broad recovery.

What would change my view is a clear and sustained decline in inflation. At the moment, I do not see a path for that to happen in the near term.

But my question to you is:

I’m curious how you see it. Let me know your reasoning in the comments.

Tracking Regimes Instead of Narratives

All of this comes from tracking inflation, growth, and market conditions in a structured way.

I’m approaching this as a retail investor, navigating the same uncertainty as most of you. I’m also a co-founder of Denomos, where we focus on tracking key macro indicators and building indices that help interpret the current regime for crypto investors.

Each week, I break down how liquidity, inflation, and growth interact and what that tends to mean for crypto markets.

The goal is not to predict exact outcomes, but to stay aligned with the environment, because I believe that’s the best path to long-term success.

If this type of analysis is useful, consider subscribing and joining the discussion.

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Also, feel free to share your perspective in the comments.

As always, this is not financial advice.

See you again soon! 🍻