Addison: Bitcoin is melting down today. That's the headline everywhere you look. It's down again. And the screens are all red. The crypto guys are losing their minds. And look, it's ugly out there. I'm not going to pretend it isn't. But here's the first thing I want you to understand. And it's going to be the theme of this entire episode. Meltdown depends entirely on your time frame. See, as I'm recording this, Bitcoin's trading right around $62,000. Off about four percent on the day. Sounds brutal, but if you zoom out, it's already down roughly 50% from its high last October, up near $126,000. So most of the damage that already happened months ago, while everybody was still feeling great. The crash everybody's panicking about today is mostly old news that people are only now getting around to feeling. And that, my friends, is exactly what I've been telling you about the airplane market all year long. Welcome back to the Truth About the Market. I'm your host, Jason Zilberbrand I'm president of VREF. I've appraised nearly every type of aircraft out there for private owners, lenders, insurance companies, operators, Fortune 500 companies, law firms, and government agencies, including the FAA. I've owned them, I've operated them, I've bought, I've sold them, I financed them. So when I talk about this market, it's not theory, it's not social media noise. It's not scraped internet data wrapped in a pretty chart. It's a real transactional experience. We have no sponsors, no advertisers, nobody paying for my opinions here. Last episode was for buyers. How to flip it down market to your advantage. This one's different. This one is about why the market feels the way it feels right now. Because I think almost everybody is misreading it. They're calling it a crash. I'm going to make the case that it's something else entirely. confidence recession. And that, if you know where to look, the signs were screaming months before any prices changed. So let's get into it. So why do I open a show about airplanes by talking about Bitcoin? Because the mechanics of what's happening over there are the same mechanics I'm watching in aviation, but it's a different asset, but it's the same human behavior. Watch how these things actually unfold. First participation dries up Buyers don't disappear overnight. They just get quiet. They stop raising their hands. Then sentiment cracks. People who were euphoric six months ago, they start hedging, start hesitating, start saying, Let's wait and see. Then the leverage gets flushed. The people who are overextended, who borrowed to play, they get forced out first. And that's the part that looks violent. And only then, at the very end, does everybody finally look around and realize that. The world didn't actually end. That's crypto today. That's the dot com bust. That's 08. That's every cycle I've ever watched. And it's precisely the rhythm of the aircraft market right now. And look at what's actually driving the crypto move because it's instructive. It's not one thing. It's a pylon. Markets are scared the Fed stays tighter for longer. Tech and AI stocks are getting hammered. And crypto Is mostly just following tech's lead right now. The Bitcoin ETFs have been bleeding outflows, and then the leverage traders who got caught long got forced liquidated. Hundreds of millions of dollars of positions wiped out in a day. And that forced selling is what makes the chart look like it fell off a cliff. Notice the order there. The fundamentals softened first, sentiment turned, and the leverage flush came last and made it violent. If you want my honest read, Thing to actually watch isn't even Bitcoin. It's whether that tech sell-off keeps accelerating, because crypto's just along for the ride. And some of the long-term technical signals people are panicking about, historically, those have shown up near every major bottom, not major tops. I'm not making a prediction. I'm telling you that it's down today and it's collapsing, are two very different statements. Here's the part that matters for you. The headlines always show up at the leverage flush stage, the loud, scary part at the end. But the real signal showed up way back stage one, when participation first started to dry up. By the time it's a headline, the smart money's already adjusted. The question is never is the sky falling today. The question is, what was the behavior telling me three months ago? And let me name the question I'm actually wrestling with, because I don't want to pretend I've got it all figured out. The honest question isn't whether businesses make less money in 2026. A lot of them will. It's whether what we're watching is a normal cyclical slowdown or the early innings of something more severe. I don't know the answer yet. Nobody does. But the aircraft transaction data I've been tracking has been pointing toward a meaningful slowdown for quite a while now, and I've been talking about it. Well before it was fashionable to say so. So I'm not panicking. I'm watching the right gauges. Which brings me to the single most important idea in this entire episode. If you take nothing else away, take this. Volume tells the story first. Volume leads price. Behavior leads price. Every single time. Most people in this business stare at price. What's the asking price? What did it sell for? What's the average? And I understand why. Price is the number on the invoice. It feels concrete. But price is a lagging indicator. It's the last thing to move because price is sticky. Sellers anchored yesterday. They remember what their buddy got in 2022, and they refuse to let go of it. So prices can look almost fine on paper while the market underneath them has already frozen solid. What actually moves first is activity. The number of transactions, the number of inquiries, how long things sit, how many deals make it across the finish line. Versus how many die on the one yard line. That's where the truth lives. And right now in aviation, transactions and inquiries are down hard while asking prices, well, in some cases have barely blinked. That gap, soft volume, sticky price, that's not stability, that's a stalemate. And a stalemate always breaks. Eventually, one of four things happens. Prices come down, sellers capitulate, financing loosens, or confidence comes back. But until one of those four things gives, you get this weird frozen quiet that people mistake for the market being fine. Guys, it's not fine. It's just early. Let me give you the mental mode I use, because it'll change how you read every market for the rest of your life. Think about it in order. Volume goes first, fewer deals, fewer calls, fewer real buyers. Then time on the market stretches. The airplane that used to move in 60 days now sits for 200. Then you get trades and retrades, deals that get renegotiated on the back end because the buyer's nervous and looking for a reason to chip the price away or walk. And then only then asking prices finally start to come down. Because sellers are the last people on earth to accept that the party's over. And the very last thing to move is the closed recorded sales price, which is the number everybody quotes and writes articles about. So the number that makes the headlines is the most lagging. Most stale price of information in the entire chain. People are navigating by the one gauge that updates last. That's backwards, people. Read the market in the order it actually moves, and you're months ahead of the crowd. So let me make this concrete, because the cleanest signal I'm seeing isn't in any report. It's in the people I know. I know brokers. I know good ones. I know real ones. Who in a normally year close 10, 12, 15 airplanes. Solid options. Been doing it a long time. And right now, halfway through the year, some of them have sold nothing. Zero. Now think about what that actually means. A guy who closes a dozen deals a year does not suddenly go to zero because he forgot how to do his job. He didn't get stupid over the winter. What happened is the pipeline dried up. The buyers went quiet. The deals that used to close are now not. Because there's more inspections, there's less financing, there's a lot of people who are digging in on yesterday's prices. And everybody is waiting for somebody else to flinch first. The airplanes are still listed. They're still being talked about. They're just not trading. And here's why that signal is so valuable. It shows up at the individual level long before it shows up in the industry statistics that everybody likes to talk about. By the time the year-end numbers confirm that volume was down 30 or 40%, the brokers living it have known it for months. A zero on a veteran's books in June is the canary in the coal mine, people. That is a behavioral signal, and behavioral signals are the ones that get completely missed if all you're doing is watching average asking prices and then counting inventory. This is not a normal seasonal lull. It's not a normal summer slowdown. This is genuine contraction and participation. And here's why I trust the the anti antidote more than the spreadsheet on this one. Industry statistics are on an average, averages and and that lie in transition, right? So when you blend the still active top of the market with the frozen middle, that blended number looks merely soft. It doesn't look like things have frozen because the healthy part of the market is still propping up the average and the slow parts. But the guy in the ground, that broker who I was telling you about, the one who's got a specific segment. He doesn't feel the average. He feels his actual pipeline. And when three or four different people who each normally close 10, 12, 15 airplanes a year all tell you the same thing. Quote, I haven't done a deal this year. That's not a coincidence. It's not all four guys are all simultaneously forgetting how to sell an airplane. This is a pattern that you need to recognize. That's the ground truth showing up before the data catches up to it. When I hear the same story, From multiple credible people. I weight that more heavily than any headline of inventory or what the inventory is doing today or what it's going to do tomorrow. Because I know the inventory count is going to reconfirm in six months anyway what I've been being told today. So let's talk now about something nobody in the brokerage world wants to say out loud. Because There is a structural piece here, and it's not really a demand problem, and it's definitely not a capacity problem, but there is something that's going on. And here's the thing people forget the number of aircraft transactions in a normal year doesn't actually swing that much. Give or take, roughly the same number of deals get done every year, year after year. What swings wildly? The number of people trying to get a piece of the pie, the number of people. Trying to get a piece of those deals. Go back to 2020, to the boom, value surged, inventory vanished, deals got easy, everything sold in a week, sometimes overnight. And so what happened? New brokers flooded in. Everybody and their brother became an aircraft broker. Because in aviation, brokerage, the barriers to entry are basically nothing. You don't need to be accredited, you don't need a license. What do you need? A website, a cell phone, a CRM? A LinkedIn profile, and boom, you look like a broker. When deals are abundant, well, the market can carry all those marginal players. There's enough easy business to go around, and everybody looks like a genius. But when the volume drops, 30-40%, and suddenly that same swollen crowd is fighting over a much smaller pool of business, the math just doesn't work anymore, guys. And That's when fundamentals come roaring back. The stuff that actually matters. Things like relationships, repeat clients, capital, real market knowledge, the ability to structure a complicated transaction like an import, the ability to survive a long sales cycle without a paycheck. The folks that I know who came in because it looked easy and looked like it was easy money, they're about to discover they're actually in a relationship business that takes years to build credibility in. There is no free lunch. You can't do it overnight. And look, if you try and lie to people about what your background is, or you try and guild the lily, they're going to see right through it. So the slowdown is going to do what every real slowdown does. It's going to purge the people chasing easy money. It's a reset back to fundamentals. And I want to be clear that that's not a tragedy. That's healthy. The survivors come out the other side with bigger market share. With better clients, with less competition, and with more pricing power. The best businesses in this industry get built in the worst markets. Because that's when discipline comes back. Guys, anyone can look brilliant when every airplane sells in a week. The real test is whether you can create value when deals are hard. And let me say something to the new folks, because I don't want this to come off as me dunking on anybody. There's nothing wrong with getting into this business during a boom. That's when opportunity is visible. That's when people get the courage to make a move. The problem is what people learn during the boom. If your entire experience of this industry is 2020 through 2022, then everything you know is wrong. Because you only ever saw the easy version of the market. You never learn how to source a deal when nobody's selling. You never learn how to hold a buyer's hand through a financing fall-through. You never learn how to keep the lights on when you don't sell a plane for six months. Those are the actual skills of the business. And they only get taught in markets like this one. So this isn't punishment. For the people willing to learn, it's the best education that you're ever going to get. It's just an expensive school. And here's the distinction that explains a lot of the confusion out there. People see a brand new flagship jet sell. They see the very top of the market still humming along. And they think, see, the market is fine. And then a broker in the middle of the market tells you he hasn't closed the thing in a year. Well, both are true. They're just two completely different markets. See, at the very top, buyers are purchasing from wealth, from liquidity, from business necessity. A little different. The $75 million jet buyer feels the market, I guarantee you. But he's usually not dependent on financing or monthly cash flow to buy it. If the airplane solves a problem, the deal gets done. In fact, in lean markets, More of the action concentrates up top and in the new aircraft, and those deals are for the top of the market too. But in the middle, the piston, the turboprop, the light and mid-sized jet world, that's a different animal. Those buyers are business owners, real estate investors, private equity guys, entrepreneurs, professionals with concentrated wealth. They might be worth millions, but they still care a lot about one thing: cash flow. Well, maybe two, borrowing costs. How their business is doing, right? And most of all, confidence. And when rates are high, when businesses are growing slower, when commercial real estate is shaky and you can't get financing, the very first thing that gets delayed is the discretionary purchase. And let's be honest, let's talk about what a lot of these middle market purchases really are. They're vanity buys, they're ego buys, the upgrade from the bonanza to the TBM, from the King Air to the Light Jet. Those are not cold ROI decisions. They're emotional decisions dressed up in business logic. You know it and I know it. When confidence is high, the guy buys the airplane and finds the justification later. When confidence falls, he finds 10 reasons to wait. Same buyer, same net worth, completely different behavior. And the only variable that changed was confidence. That's why I keep calling this a confidence recession, not an asset recession. The people who normally trade up. Are just staying put. And the 90% of the market that the brokerage world feeds off of, that semi-hetin high net worth individual with the big ego who wants to be the vanity buy, that's exactly the segment right now that's frozen. Those are the airplanes that are not selling. And it's not because they disappeared, it's because the marginal buyer did. So if that's the diagnosis, what do you actually do about it? Whether you're a broker or a dealer or an owner, here's how the people who come out of this on top are going to behave. Stop staring at price and start watching behavior. Volume, inquiries, days on the market, the deal fall-through rate, those tell you where things are going months before the price does. If you're only looking at asking prices, you are driving by looking in the rearview mirror or with blinders on, however you want to look at it. If you're a broker, This is the year you double down on fundamentals that the tourists can't fake. Relationships, repeat clients, know your specific market, know it cold. Being the person who can actually structure and save a hard deal, not just list a plane and wait. Guys, the business is contracting. Your job is to make sure you're on the right side of that contraction. And don't confuse a frozen market with a dead one. The deals are still there. Trust me, I see them every day. They're just harder to come by. They're slower to get closed. And they go to whoever's still standing and still credible when the buyer finally moves. The discipline that you build right now, while it's miserable, is exactly the muscle that prints money when confidence comes back. And guys, I promise you, and everything that I know, that it will come back. It always does. I know things are terrible right now. They're not going to stay that way forever. So Let me bring it home. Everybody's looking at the loud, red, scary part, the Bitcoin headline. The price drop, the panic. And they're missing the real story which happened quietly months ago in the behavior. Participation dried up, sentiment cracked, the leverage got flushed, and only now is everybody catching up to what the volume was, screaming the entire time. Guys, this isn't a crash. It is a confidence recession, and it's gonna do what these resets always do. It's gonna flush out the easy money crowd. And hand the market back to the professionals. And if you're one of the people doing this the right way, the boring way, the relationship way, the cash flow way, this is not the worst thing that ever happened to you. This is the moment you take share. And here's where my world comes in. When prices are flying, nobody cares much about precision. Everybody's a genius. Everything's going up. But when money gets tight and the market freezes, Suddenly, everyone wants to know what something is actually worth. That's not a coincidence. That's the whole point. Volatility, slowdowns, resets, those are when knowing the real number stops being a luxury and becomes the thing that protects you. This podcast exists for one reason to analyze aircraft as capital assets without brokerage spin and without the manufacturer narrative. And remember, when you need accurate. Defensible and data-driven aircraft values, there is only one name in the industry to trust, that is VREF. Visit VREF.com to get started today. The market is moving, it's just not moving where they're looking. I am Jason Zilberbrand, and this is the truth about the market. Until next time, fly safe and stay smart.