Bitcoin Stuck? Coinbase Expert Reveals What’s REALLY Controlling the Price w/ David Duong
Summary
- Bitcoin is currently trapped by "Gamma" positioning: Short gamma between $60k-$70k accelerates downside volatility, while long gamma at $85k-$90k acts as a ceiling, capping upside rallies.
- A major narrative shift is occurring where Crypto is being lumped in with the "SaaS Apocalypse" (Software as a Service), causing correlation with tech stocks suffering from AI displacement fears (e.g., Block laying off 40% of staff).
- Institutional adoption is moving from passive holding to active DeFi participation, evidenced by BlackRock's deal with Uniswap and Apollo's acquisition of Morpho tokens.
- The long-term bullish thesis rests on the "Agentic Economy" (AI agents paying AI agents), where Ethereum (ERC-8004) serves as the settlement layer for machine-to-machine microtransactions.
Trade Ideas
Block (SQ) laid off 40% of its staff. The market is currently pushing a "SaaS Apocalypse" narrative, lumping crypto companies in with software companies that are being displaced by AI. While Duong argues crypto and SaaS should diverge, the current market psychology correlates them. If the market believes AI renders SaaS (and by extension, fintech/crypto-tech) less valuable, these stocks will suffer multiple compression regardless of underlying crypto prices. Avoid fintechs caught in the crossfire of the "AI replacing software jobs" narrative until the correlation breaks. Fed rate cuts could stimulate the entire tech sector, lifting SQ despite the narrative.
Apollo (APO) announced a deal to acquire Morpho tokens, and BlackRock (BLK) is integrating with Uniswap for institutional trading. This marks the transition to "DATs 2.0" (Digital Asset Treasuries). Institutions are no longer just buying spot Bitcoin to hold; they are actively entering DeFi to trade "block space" and yield-bearing protocols. These firms are building the rails for T+0 settlement and higher loan-to-value ratios. Long the infrastructure giants that are legitimizing and financializing DeFi protocols. Regulatory pushback or failure of the specific protocols (Uniswap/Morpho) to scale institutionally.
David Duong
Head of Institutional Research at Coinbase
Dealers are "short gamma" in the $60k-$70k range and "long gamma" in the $85k-$90k range. Duong explicitly downgraded his forecast to "neutral." When dealers are short gamma, they must sell into price drops to hedge, accelerating downside trends. When they are long gamma (at $85k+), they must sell into rallies to hedge, creating a price ceiling. Bitcoin is structurally pinned. It lacks the mechanics to break out above $90k currently and risks accelerated selling if it dips below $60k. A massive exogenous liquidity shock (Fed rate cut) could override dealer positioning.
David Duong
Head of Institutional Research at Coinbase
The launch of ERC-8004 on Ethereum saw 22,000+ subscriptions in 3 days. This standard enables "machine-to-machine" economy verification. AI Agents need a trustless, permissionless way to transact and verify "credit scores" (FICO for AI). Ethereum is positioning itself not just as a ledger for humans, but as the transactional currency for the AI economy. Long Ethereum (via ETF proxy) as the primary currency for the emerging Agentic Economy. Other L1 chains capturing the AI agent market share due to lower gas fees.
Up Next
This Milk Road Macro video, published February 27, 2026, features LG Doucet, David Duong discussing SQ, APO, BLK, IBIT, ETHA. 4 trade ideas extracted by AI with direction and confidence scoring.
Speakers: LG Doucet, David Duong · Tickers: SQ, APO, BLK, IBIT, ETHA