Bitcoin Dumps to $56K as the FED Spooks Markets!

Bitcoin Dumps to $56K as the FED Spooks Markets!

Bitcoin dumped as low as 56k earlier this morning as the fed’s hawkishness spooked the markets in $450 Million worth of bitcoin was liquidated in the last 24 hours and in typical fashion from today’s fed meeting Jerome pal gave the market nothing it wanted and nothing it needed simultaneously plus we look at bitcoin’s Price action during bull markets to see if 20% draw Downs are anything new and like with every time that the price drops we like to take an opportunity to zoom out and look at the long-term Catalyst for bitcoin’s Price action and how it’s demonetizing the rest of the financial World alternative investments just don’t Stack Up welcome to the Bitcoin Daily Show I’m Dante cook head of swan business isn’t it crazy that Jerome Pal’s words alone is what fundamentally drives market movement in today’s world leading up to today’s meeting the market was already positioning itself for hawkishness especially at after the ECI or employment cost index Rose to 1.2% above the .9% it was in 20123 this goes to show that wage increases are one of the fundamental drivers that is keeping inflation stickier for longer and at 2 p.m today Jerome pal delivered nothing that we wanted and nothing that we needed simultaneously he said that fed interest rates were to remain stable or remain high between 5.25% and 5.5% because there isn’t enough information yet to know that we’ve reached the fed’s target of 2% inflation or are inching closer to it which we all know is a fictional number and we’re never going to go back to at least not in the short term the one piece of doish news that he announced during the FED meeting was the tapering of quantitative tightening from 60 billion US treasuries a month down to 25 billion treasuries a month and also 35 billion more mortgage back Securities a month this means that the rate that the FED is tightening its balance sheet is slowing indicating that we’re moving towards a posture of quantitative easing history tells us that although the FED is doing the right and responsible thing in the short term when stuff really hits the fan the fed’s balance sheet will continue to expand and blow out again but you know what we’ll take the short-term win because bitcoin’s price has reacted positively since the press conference 2 p.m. the price price was around 57,200 and now it’s sitting a little bit higher than $58,000 in the wake of bitcoin’s price collapse people like Jim Bako have moved clearly from the world of being an investor and an advisor thinking about long-term strategies in the macro world to clearly a short-term Trader and a short-term Gambler he says that anybody who started investing in the Bitcoin ETFs from when they launched on January 11th are now right about Break Even in terms of their Investments when is the criteria for a successful investment been after a period of 4 months he and other Bitcoin haters who like to look at short-term snapshots of bitcoin’s price forget to mention that Bitcoin is up 32% year-to date over 100% over the past year and over the last 5 years over 900% real investors long-term investors and bitcoiners alike know that we are in this for the Long Haul and that 20 to 40% draw Downs are just just part of the game in looking at past price movements there’s always a point in every bull market cycle where bitcoiners well not really bitcoiners short-term Traders and gamblers and the mainstream media says that Bitcoin is a Ponzi scheme it’s over the bull Market’s over and you all are fools for investing in this Ponzi scheme some people like to call it a roller coaster a roller coaster to Financial Freedom and bitcoin’s a different kind of roller coaster than other quote unquote stable assets because you know the worst thing about a roller coaster ride is you start and end at the very same place let’s take something like Starbucks who everyone in America loves and it’s a stock that advisers always recommend to their clients let’s look at its price performance on today alone it stock is down over 177% over the past month it’s down 20% year to date it’s down 22% over the past year it’s down 36% and over the past 5 years it’s down 6% talk about a roller coaster ride to Nowhere when you factor in inflation the increase in other assets that you could have invested in and the cost of living now that we have in a postco world would you have been better buying and holding Bitcoin or buying and holding Starbucks Bitcoin is still in price discovery mode as you can see from this throwback interview with Becky and Tom Lee from CNBC where she says a 1 to 2% allocation into Bitcoin will would be crazy that would be like gambling your life savings away how could any investor do that and the price was at $5,000 per coin when this interview happened right now if you actually think it’s undervalued by that extent well you know we’ve kind of we think the best approach for most people is just to put 1% or 2% are you saying that I get that if you’re somebody who’s got a lot of assets I I still think it’s crazy but for a retail investor somebody who’s saving for retirement and putting that aside that seems crazy to me well it’s basically a you know you could afford to lose 1% if that’s 1% of your portfolio but that’s crazy you might as well throw it away on high fees to an investor too to an average like this you’re taking a flyer on that you don’t know where it’s going to go or what’s going to happen well in a way that’s right Becky that for the majority of people it’s you know 1% is like a small risk bat but you know Bitcoin makes all of its gains in 10 days in a year I think this is an example that you know if you exre the 10 best days Bitcoin loses 25% a year so you got to essentially hold it or huddle it as they say uh to really capture the gain and you can look at other interviews like this one with bill Mayer and realize we are still so early in Bitcoin Bitcoin was was started or cryptocurrency was started as a goof really by someone we don’t know who it is somebody who used the the fake name it was a decentralized currency so that really when it started so you could pay for things and not be detected like it was all this underground criminals it was started it was for criminals but you know that it’s still for criminals but Humanity just uh attaches value to things that really mean nothing you’re wearing a black T-shirt that could be a black T-shirt from Target you put a Ralph Lauren thing on it we just say that that’s worth more but it still it exists it’s something Bitcoin is nothing do you know how they make they establish Bitcoin why it uses more electricity than some countries did you know that about Bitcoin I did know that okay because there are yes mining there are football field size buildings that have nothing but supercomputers that are it’s like the game of pick a number from 1 to 10 except the numbers between one and infinity and the person guessing the number is in The Matrix and the person who has created the number is a fictional person also and that’s how that’s a way to run a currency you know Matt Damon love him but him and the other celebrities who told people to get into this they’re getting an awful lot of now and I understand why they suggested that people get into this Ponzi scheme and it’s it’s not going to come out well for any of them I think it’s not going to come out well for most of them but some people are actually scoring the odd one okay well Seth Green got his uh got his board ape stolen his monkey yeah yeah it’s just suppos to be uh it’s also very easy for the money to just disappear if like you forget your password yeah then it’s just gone right but if you forget where your bank you can lose it to the average person and average investor still doesn’t understand Bitcoin that’s the Arbitrage that’s the opportunity when liquidity enters the market either through the fed or the US Treasury who by the way announced their first treasury buyback program since 2002 which is in an attempt to stabilize the world’s most liquid Market the program starts on May 29th and allows the US Treasury to buy up to $2 billion worth of treasuries in $500 million worth of tips per week and it has discretion on additional measures that could take to stabilize liquidity and although there’s no fire this is essentially smoke that we can see smoldering off into the distance to other people to say the treasury market isn’t as liquid and isn’t as deep as once was thought or advertised there’s problems Brewing under the surface the liquidity needs somewhere to go and somewhere to flow to and inevitably Bitcoin is the best and most effective liquidity absorber there is but if you choose not to invest your money into Bitcoin where are you going to invest it right now the 4 PE ratio of the stock market is at 20 I don’t think that’s expensive and the commercial real estate market is well hot garbage the value of buildings in metropolitan areas are worth less than the paper that they’re written on listen to what New York commercial real estate developer Bruce Ratner had to say on CNBC with our boy Ross this morning can we talk real estate first sure of course uh what do you make of what where of where we are we can talk about mortgage rates just about every single day and where interest rates really sit but between commercial real estate residential real estate I know you’re you’re not out of the business you’re sort of in the business out of the business but but maybe then you can speak freely yeah I can always speak freely so what do you think so first of all let’s talk commercial real estate commercial real estate is in terrible trouble I mean you’ll hear people say it’s you know it’s bottomed out it’s not going to bottom out when you have vacancy rates in this city of 25% and occupancy rates of almost 50% or less than 50% it can’t recover and that’s because our whole nature of work has changed small business confidence is at alltime lows with 61% saying they don’t expect the economy to approve inflation continues to rip and remains stickier and more persistent than the government or anyone had thought and we all know how expensive residential real estate is right now we’ve covered it many times in many episodes and so with that where are you to invest your money if it’s not Bitcoin what else is attractive right now Bitcoin is demonetizing the monetization that has been trapped in these asset classes over the last 50 years I mean look at this great chart from Wicked showing Bitcoin as a store value relative to other assets you could have invested your money into as Michael sailor says Bitcoin is for the money you can’t afford to lose one is on a mission to help you avoid the basement and help you think how to properly allocate your portfolio into holding Bitcoin so that you can avoid the Fiat debasement and monetary debasement that’s coming down the pipe when liquidity enters the market not if but when tomorrow at 5:00 p.m. Eastern 2 p.m. central haa zigui Swan CIO is hosting a webinar in the latest of our retirement webinar series called the numbers don’t lie where he’s going to be walking through the long-term potential and implications of these catalysts that we talk about in this show every single day and how to properly allocate Bitcoin in a retirement portfolio use the link in the show notes to sign up for the webinar even if you can’t make it live you’ll get a link to the recording so that you can watch it later and with that we’re signing off for the day this is Dante cook.com happy stacking [Music]

Bitcoin dumped to as low as $56K earlier this morning, as expected hawkishness from the Fed spooks markets and $450 million is liquidated in the last 24 hours. We look at the history of Bitcoin’s price action in bull markets to see if 20% drawdowns are anything new. We also zoom out and look at the catalysts driving Bitcoin’s long long term potential and why alternative investments just don’t stack up.

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