Everyone’s asking the big question: Is the market bottom In?
Nobody knows exactly but our latest guest Michael Nadeau has a framework for navigating this late stage bear market.
Michael is the Founder of The DeFi Report, one of crypto’s most data-driven DeFi research newsletters. Having survived bear markets before this, he shared a few things worth keeping in mind as we enter the second half of 2026.
On the market bottom: Similar to how the classic BTC top indicators never triggered this cycle, Michael thinks this bear market will look similar to the last bear market in 2022 but also offer its own unique twist like the 2025 bull market top did. Timing the bottom is near impossible so Michael is deploying at these levels, even though he doesn't have strong conviction the lows are fully in. He reminded us that FTX was insolvent for six months before anyone knew, so the lesson is to stay vigilant and humble about what risks might still be lurking this cycle.
On what to look for: The protocols that not only survive but grow through bear markets are the ones worth paying attention to. A few names he referenced as examples of DeFi teams bucking the bear market doldrums is Lighter, Morpho, Derive, Ethena, Maple, and Pump. He recommends investors pay closer attention to the application layer tokens with real revenue, real buybacks, and real users this cycle. The next bull run will likely reward protocols that build genuine product-market fit during the downturn.
On investor psychology: Michael's most useful framework is inverting the question, an idea once made popular by Charlie Munger “invert, always invert” referring to a problem-solving mental model where you look at a challenge backwards. Instead of asking how to make money, ask what are the best ways to lose money in crypto? Michael offers some bad habits to avoid such as ideology seeping into your investment framework, falling in love with assets, chasing performance, and failing to do the work in the bear market. He even calls out the fact he has never own HYPE because he’s simply never found a good entry and won’t chase it.
“I think what saddens me is lots of people leave crypto in the bear markets. So if you wanna lose money, you leave in the bear market and you come back in the bull market. You should be doing all the work right now, in these bear markets, deeply understanding where the future is going and building conviction. So I think staying in it is a good way to not let that happen to you.”
On the long term view: Michael offers us something to chase: a BTC price target at $1M but no timeline to that prediction other than confidence that “BTC will keep grinding.” Everything else in his portfolio is measured against BTC, his largest holding.
Michael’s an excellent long term investor to help you think about what phase we are living in, this late into the bear market, but he also offers views to challenge some of our own biases between Nomatic and me. We hope you find it equally helpful in thinking about the construction of your own portfolio this bear market.
Listen to the latest Edge Podcast for the full conversation with Michael!
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🔗 Guest Links 🔗
► The DeFi Report (one month free): thedefireport.io/friends
► The DeFi Report on X: x.com/the_defi_report
► Michael Nadeau on X: x.com/JustDeauIt
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DISCLAIMER: Nothing said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed by hosts or guests on the show are solely their opinions. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this podcast.
