You’ll know Guy Turner as the person who eloquently breaks down Crypto topics to his 2.2 Million subscribers on Youtube.
What I like about his analysis is that he takes you to the edge of your comfort zone on complicated topics and doesn’t just assume that you know your jargon.
Guy gives his 2 cents on what might happen in the Cryptocurrency markets but cleverly follows everything up with, “yep, but none of this is financial advice.”
He’s had a passion for Bitcoin since 2013 and started sharing his knowledge and insights by writing for the Coin Bureau website, which led to launching his now-popular YouTube channel during the crypto bear market of 2019.
Guy Turner eats, sleeps and dreams about Crypto, and he’s happiest when researching for his next video.
It’s been a rough end to 2022, but Crypto is starting to pick up again. Prices have risen over the past week, and Bitcoin has climbed back over the psychological $20k level.
Crypto looks like it’s getting its Mojo back.
The sudden rally was unexpected, given that we’ve been in a bear market and there’s been no good news in recent months.
The catalyst for this rally is the recent release of positive inflation data in the United States, which has led to speculation that the Federal Reserve may ease off on interest rate hikes or even pause altogether.
In simple terms, Interest rates go up. Crypto, come down.
And so should inflation.
It’s clear why everyone in the crypto community is waiting with bated breath for interest rates to come down because there’s a direct impact on the price.
Guy says that while the inflation rate of 6.5% is still high, it’s an improvement from the previous month’s 7.2%, and markets are pleased with the news.
Guy Turner:
“The data showed that inflation in the U.S. had fallen from 7.2 % in November to a much healthier 6.5% in December, suggesting that the federal reserve’s aggressive hiking of interest rates since last March is having the desired effect.”
It’s worth noting that 6.5% inflation is still well above 2%, a rate generally accepted by most central banks. But it shows that the Federal Reserve’s aggressive hiking of interest rates has the desired effect.
It’s all now leading to speculation that Fed Chairman Jerome Powell could be ready to start easing off on hiking rates or even pause altogether.
Guy says that while there may be some short-term pain, the Fed is determined to keep inflation under control. Despite inflation still being at astronomical levels, the recent news was enough to get buyers excited and drive the crypto rally.
It demonstrates how irrational Crypto can be.
Guy Turner isn’t sure that this rally will last and says you’d be wise to take some profit off the table, but “that’s not financial advice.”
He thinks there needs to be more liquidity in the market, and the people buying are institutions because there’s no way retail investors could have caused a rally like that.
Guy Turner:
“The recent rally in crypto prices can be attributed to the unexpected good news on inflation, with institutional investors taking advantage of the opportunity to diversify their portfolio even amidst a bear market.”
There’s More Than Enough Wiggle Room for More Crypto Pain Ahead.
You would have heard the name Jerome Powell in the media.
He’s the fed chairman determined to keep rates high for as long as needed to “get the job done” on inflation, even if it causes further damage to the U.S. economy and the world.
Guy says the Fed’s terminal rate, the highest level interest rates can rise to in this rate hiking cycle, is 5.1%, meaning there’s room to go higher with current interest rates at 4.4%.
He says officials are likely to pause at some point to allow the impact of monetary policy tightening to make its way through the economy and potentially stay that way for most of 2023.
Guy Turner:
“Jerome Powell has insisted that he’s determined to keep rates high for as long as needed to get the job done on inflation.”
Persistent High Inflation is a much more severe threat to economic well-being in the long run than some supposedly short-term pain.”
Don’t underestimate Jerome’s determination to go down in history as the man who slew the dragon of inflation.”
Michael Burry — “The Big Short”
Burry is a well-known figure in the world of finance. He’s a hedge fund manager who predicted the housing market’s collapse in 2007, despite having no real estate background.
He shorted the market, a term to bet against it doing well. Burry made a lot of money during the 2008 crash when everything played out exactly as he had anticipated — making him $100 million in personal profits and another $700 million for his investors.
According to a series of Tweets, Burry is now predicting that we’ll have a second spike in inflation.
Michael Burry — Source
“Inflation peaked.
But it is not the last peak of this cycle.
We are likely to see CPI lower, possibly negative in 2H 2023, and the U.S. in recession by any definition.
Fed will cut, and the government will stimulate.
And we will have another inflation spike.
It’s not hard.”
Tweet 2.
Michael Burry — Source
“Inflation appears in spikes.
When the spike resolves, it won’t be because of Biden or Powell.
It will be because that is the essence, the nature of inflation.
It resolves, fools people and then comes back. When it comes back, neither the POTUS nor the Fed will take credit.”
Final Thoughts
I believe we have more pain ahead.
It may seem obvious, but crypto’s price movement says otherwise.
Occam’s Razor is a theory that when faced with multiple decisions, you should choose the simplest one.
The most logical explanation will usually be the outcome, just like if you hear hoofprints clunking outside your house, it’s more likely to be a horse than a zebra.
It’s hard to see a different outlook for Crypto at the moment — with more wiggle room for interest rate increases, inflation still astronomical, and the FED setting their interest rate stall out for most of 2023.
I’m also not hearing anyone else with a differing point of view other than the market is terrible and there’s more pain ahead.
If you’re a long-term thinker, you might be OK with the short-term dynamic of the down market and even happy about it.
Everything’s on sale.
Dollar-cost averaging is a brilliant strategy where you can invest a fixed amount of money at regular intervals.
It’ll help you average the cost of your investment over time, so you don’t have to worry about buying at the right time. It also helps reduce the impact of volatility on the market by spreading your investment over time.
But none of this is financial advice 😉
This article is for informational purposes only; it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.
This article is for informational purposes only; it should not be considered financial, tax or legal advice. You can consult a financial professional before making any significant financial decisions.