Unchained With Rate Cuts and Upcoming Elections, What’s the Best Play in Crypto? - Ep. 709
Sep 24, 2024
Quinn Thompson, CIO of Lekker Capital, and Travis Kling, Founder of Ikigai Asset Management, dive into the impact of the Fed's recent rate cut on the crypto market. They discuss Bitcoin's underperformance against traditional finance, potential catalysts tied to the 2024 elections, and what it means for various crypto assets. The duo explores the risks of Japan's yen carry trade on crypto and the future of Ethereum amidst regulatory changes. Insightful investment strategies emerge, especially regarding SOL and the significance of Bitcoin ETF approvals.
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Rate Cut Rationale and Implications
- The Federal Reserve's 50 basis point rate cut was a surprise, driven by labor market deterioration and decreasing inflation.
- This cut, alongside global easing trends, may reignite inflation and boost assets like Bitcoin and gold.
Economic Strength and Influencing Factors
- Despite current economic uncertainty, the US economy shows signs of strength with GDP growth above 2% and low unemployment.
- Increased government spending and immigration policies are influencing job growth and economic metrics.
Crypto Summer Slump
- Crypto's choppy summer performance, despite positive macro trends, is attributed to idiosyncratic events like GBTC unlocks and Silk Road seizures.
- Crypto's momentum-driven nature exacerbates these downturns, leading to apathy until a catalyst emerges.