[, Music ] as it relates to the bond market. I we want to see and would be concerned. If we didn & # 39, t see disorderly conditions. We think we're likely to see inflation move up and, as i said, it will take some time to get there.
It's time to once again address the damn elephant in the room. The fact that bitcoin is seemingly correlated to the macro economy, the us in particular, what happens there - can have knock-on effects to other major economies.
Bitcoin is undeniably popular over there, but perhaps most importantly, it's. A narrative traders need something to trade off of so this is as good as any it's, not something i necessarily believe in makes any sense, fundamentally speaking, but if you do believe in the correlation continuing at least for now, here'S the strongest narratives to pay attention to for more bitcoin adoption bond yields, inflation, tech stocks, jerome powell and the dollar strength index.
I will break down each one of these in today's. Video timestamps are below what i am doing with my crypto right now. What i think the next big hype thing is in crypto all of that and more, but i hope the irony of the situation is not lost on you.
People who are saying that this is a bad thing are also admitting that bitcoin is correlated to this [ Music ]. I meant the chart [, Music, ], [ Applause, ] market crashes are bad, but they're, always temporary long-term.
This is a never-ending pump. It's, one of the most bullish comparisons that can be possibly made it's. The literal embodiment of this meme and also, fundamentally speaking, bitcoin solves these problems.
Stock market crashes, because of higher interest rates, bitcoin worried about inflation, devaluing literally everything, bitcoin economic bitcoin. You get the point smash like if you agree, and if you're, not earning already, you can get yourself.
Six percent compounding interest holding top crypto currencies with channel partner block fi, which is backed from the biggest names in the industry like gemini and coinbase, where funds are withdrawable at any time link in the description, hey that's, pretty good.
First, up bond yields there's more than a few financial elites who are pretty bummed out about the economy reopening about the pandemic winding down, because for many, including crypto holders, it was a banned demick.
But this week we had a real scare in the markets about all that, potentially coming to an end primarily from what we're, seeing happen in the bond market to understand why we must first understand that there is an eternal war for your fiat.
Do you deploy your capital to the risk on stock market or tuck it away in the risk-off bond market? That question is multi-faceted but can depend on how attractive the rates are on government bonds and for the past six months we've.
Seen a rapid ascent in those returns now to the point as high as just before the pandemic began. So if you're holding stocks right now, you might suddenly be asking yourself. Should i sell these risky assets for a safe bet, and even worse still, should i sell because others might be thinking of selling, so a rising of yields in the bond markets can exacerbate a stock market sell-off at least that's? How most interpreted depends on who you ask? Rising yields are a great sign, obviously, since when was a a chart that goes up like this, when was that ever a bad thing, but regardless of opinion, it seemingly hit tech stocks, the hardest paypal amd, nvidia apple micro strategy and, of course, bitcoin.
Why so badly, though, especially considering if we zoom out the rally in bond yields, is not that big a deal? Surely this inverse relationship really seems to be a new development, but that's where the correlated boogeyman threatens to enter the room, but i dreamed the boogeyman was after me and he's right, boogeyman inflation.
Now i do want to make a point that it's, a fallacy to believe that traditional finance is a well-oiled and mature system. That knows exactly what it is doing, that's, giving them too much credit. Literally, investors are still trying to interpret what a rise in bond yields really means for the stock market, but the scared interpret it this way.
If government bonds give you more money that could lead to inflation, and people are already very worried about this boogeyman, because we already had a ton of money being generated, but haven't felt real world inflation.
Yet so maybe soon the federal reserve will step in and raise interest rates to combat this potential inflation, because everything costing more is obviously bad for the economy, but higher interest rates are also bad for the economy.
Potentially michael saylor gets some critics for raising debt to buy more bitcoin first off. How dare you seriously, but the entire economy is leveraged with debt to buy more assets. It's, just what they do.
As long as interest rates remain low on that debt and assets keep appreciating value. There is no problem you create or you buy assets that are high quality, pristine assets, you hold them forever and you and when you need cash to live, you finance them.
You borrow against them, but make it difficult to pay back that debt and you could see a huge crash, but all this is speculative. We haven't yet seen actual inflation, not for consumers, at least just the anticipation that it may be close.
I don't want to alarm you, but there may be a boogie man or boogie man in the house. The five-year break, even inflation rate, a tool to measure predicted levels of inflation over five years is at as high a level as before.
The 2008 financial crisis, not a good look, inflation, also cuts into projected profits of any company significantly, which has most definitely affected tech stocks. Technically all stocks could be suffering because of this, but the major thing about tech stocks, including bitcoin, is actually quite simple.
They have it the worst right now because they performed so well recently. Therefore, any pullback was going to be more extreme. They just had a lot more room for people to dump and still make a profit excellent.
So a lot of confusion and panic enter jerome powell. We need to hear from the chairman of the federal reserve to allay our fears and strengthen the markets with robust policies main two things. We want to hear that he will definitely continue to keep interest rates low and that he will definitely do something about the rising yield in bonds.
That didn't end up happening markets immediately tanked after this, but it also - and i need to stress this - it was not a negative statement at all. He basically said he was comfortable with a bit of inflation and wasn't going to react to these short-term fluctuations, which is a good thing rates are still low.
This is not a bad result at all. It could have been better, but it certainly wasn't. Bad people got this wrong. In my opinion. Next up the dollar strength index. There might be some correlation here. We can clearly see when bitcoin topped the usd gain strength and it weakened when bitcoin grew.
So will the dollar gain strength from here charting it, and you would expect it to grow from its low position, not good, which is why it's. A great thing that more debasement i mean stimulus is on the way and a very large amount of it for good measure.
So my opinion on this whole situation is fear in the markets is definitely warranted, but it seems a little early for it. A crash is potentially coming. The only reason i say potentially is because it depends on what economic policies could be enacted to delay it, but until we see actual consumer price inflation and a commitment to no more stimulus, fears of a real recession are presumptuous.
So what am i doing? As a result of all of this, i sold every? No, i stay out of debt. I don't use leverage i don't sell. I just buy more consistently, not very flashy. I know patience is key, but if you really want to 100x your portfolio there's at least one thing that i'd say you should be paying attention to potentially the next hype wave in crypto daos, specifically investment ones.
Dows have recently become extremely important for risk on investors. Aka degenerates so much so hashkey, possibly the single largest crypto investment firm in the world is backing a new dow service platform to meet the demand called dora factory here's.
Why the u.s economy has a spac bubble right now, early investors are making a killing because of the hype for any new company. Launching almost everyone wants to get in at the ground level, but not everyone has access to them, and we are now seeing this exact situation start to come over to crypto.
There's, a ton of popular fundraisers for new projects on top of eth, but increasingly so on, finance, smart chain and polka dot. Now too, usually, making good money for those that can get in total raises are small, which is good, very different to icos, but as a result, they're pretty difficult to get into.
This is where a dao with influence and capital can negotiate allocation and help their communities get the opportunity to invest sounds like the 2017-2018 ico bubble. I know it won't last forever, but there are at least some differences.
Anyone could get in on icos because they'd, raise 50 million dollars, usually at least they would not use those funds to support the token price at all and have no working product to show for it. Only in crypto right currently ido's, raise 1 to 3 million on average support the token price with a portion of funds raised and have a working product that's.
Why? I think the dow space could be the next big hype? Wave in crypto, but those are the things i think are most important for crypto holders to pay attention to right now. Let me know what you think leave a like.
If you enjoyed that's very much appreciated, and i'll see you in the next one.