Real Vision: Finance & Investing
Is Crypto a Bull Signal for Risk Assets?
Dec 7, 2023
Edward Snowden, whistleblower and privacy advocate, discusses the correlation between liquidity cycles and the performance of crypto and stocks. The speakers also explore the potential impact of higher interest rates on cryptocurrencies and investment opportunities in the crypto space. They compare Solana to Ethereum and discuss the rise of Coinbase.
47:04
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Quick takeaways
- Bitcoin and other cryptocurrencies tend to perform well when liquidity conditions are favorable, making them a bet on future liquidity expansion and bullish for risk assets.
- Understanding liquidity conditions and expectations for future liquidity can provide insights into market trends and performance across various asset classes.
Deep dives
Bitcoin as a Hedge Against Currency Debasement
Bitcoin is not an inflation hedge but rather a hedge against currency debasement. The value of Bitcoin is driven by liquidity cycles and has a strong correlation with central bank liquidity. When liquidity conditions are favorable, Bitcoin and other cryptocurrencies tend to perform well as they are seen as a bet on future liquidity expansion. This correlation with liquidity also extends to other risk assets like stocks, as they share the same macro tailwind. Therefore, if crypto is rising due to a more bullish liquidity outlook, it is also bullish for risk assets more broadly.
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