Photo by Sander Sammy on Unsplash
People are divided.
Inflation is at a record high, and interest rates are increasing with a looming recession ahead of us.
It isn’t looking pleasant, but for some reason, the cryptocurrency markets are rallying off Jerome Powell’s announcement that the Fed appear to be coming to the end of their rate hiking cycle.
People with a track record of understanding market dynamics and how this will all play out think we’re in for the most significant crash some of us have ever experienced.
I happen to think there’s more pain ahead too.
The most prominent person to predict anything in the financial markets is Michael Burry, who bizarrely tweets his predictions and then deletes the tweets straight after.
I wonder if he knows about the screenshot feature on our phones and the bot account that copies his tweets and reposts them for safekeeping and for the entire internet to see.
It all adds to Burry’s mystery and allure. A bit like how Christian Bale portrays his character in the movie “The Big Short”, he’s a little strange and different to the rest of us.
Burry has now entirely deleted his Twitter account, but he left one last message for us to ponder before he left.
Burry sent the above Tweet off the back of another tweet he posted saying that this level of inflation will come back again, and when it does, Jerome Powel or president Biden won’t take the credit for it.
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 US in recession by any definition. Fed will cut, and the government will stimulate.
And we will have another inflation spike.
It’s not hard.”
Cryptocurrency Might Not Protect Your Income Short Term but Will Preserve Your Wealth.
Robert Kiyosaki is one of the world’s best personal finance authors who wrote the global best-selling book ‘Rich Dad Poor Dad’.
He’s a multimillionaire who made his money mainly from selling out conferences to people wanting to improve their lives. He used his book as a lead magnet to higher priced items, namely 15 thousand dollar conference tickets.
You may have seen a disproportionate amount of videos coming up with his face on because Kiyosaki is now talking about Cryptocurrencies and telling you to invest, but only when the Fed pivots on their stance on interest rates.
Robert Kiyosaki — Source
I am a Bitcoin investor as I am an investor in physical gold, silver, & real estate.
I am NOT A TRADER or flipper.
When BITCOIN hits new bottom, $10 to $12k? I will get EXCITED, not worried.
I bet against the Fed, Treasury, and Biden, & bet on G, S, & Bitcoin.
Raising interest rates will kill the economy. Stock, bonds, and real estate will crash.
Fed will pivot.
Buy Gold, Silver & Bitcoin before the FED pivot.
Take care.”
Companies With Enormous Amounts of Employees Are Having a Conversation About Layoffs.
Gary Vaynerchuk, a serial entrepreneur and investor, says he’s had at least 20 business owners with 500-plus employees ask for advice and say, “are you doing layoffs.”
He says he always speaks to experts about what might happen in the markets, most of which are divided.
So much hinges on what the Fed will do with interest rates, but he now sees this market overexcitement as something that makes him uneasy.
Gary Vaynerchuk:
“What I call smart money and not me, by the way, I’m not an economist, but I mean smart money, and I speak to many of these people.
I’m fascinated by how divided they are, but almost everyone agrees that everything is cloudy.
I’ve had a lot of high-level conversations with many people I respect, and it just seems like there’s a little bit of clarity in 8–10 weeks that we’ll see play out.
Look at the big tech companies, and I would say as an owner of a big company, I’ve had 20 different owners with 500 plus employees reach out to me and say, “are you doing layoffs”.
They’re thinking about it, and it’s in the air.”
Crypto Has Woken Up, but It’s Rare for a Bear Market To End With Euphoria Coming in So Quickly.
Master trader Gareth Soloway has used fundamental and technical analysis over a 25-year career and has experienced around 100 bear markets in stocks, commodities, currencies and Crypto.
Soloway was among the few traders who predicted the peak of the crypto market in the fourth quarter of 2021 and accurately predicted its decline.
He says this is not a sign of a new bull market and warns investors not to get too excited.
He’s been through many bear markets in his 25-plus years of trading, and he knows that it’s rare for a bear market to end with Euphoria coming in so quickly.
Usually, the first 10–20–30 per cent after a bear market, investors are very sceptical, and that’s not what he’s seeing this time, which makes him a little nervous.
He’s quickly seeing a lot of hype and is also concerned about the incredible pumping across all social media platforms.
Gareth Soloway believes that the big upward move in Bitcoin, Ethereum, and crypto markets at the beginning of 2023 is just a bear market rally.
Gareth Soloway — Source
“We’ve had an impressive move on Bitcoin. You see a lot of this hype building quickly, which is a little concerning for me.
I’ve been through many bear markets in my 25-plus years of trading, and a bear market rarely ends with Euphoria coming in so quickly.
Usually, the first 10–20–30 per cent after a bear market, investors are very skeptical, and that’s not what I’m seeing this time.
It makes me nervous. People were biding their time and jumping back on the bandwagon.
I’m seeing incredible pumping across all social media platforms.”
The Cryptocurrency Beach Ball Is Being Held Underwater.
Macroeconomic investor Raoul Pal is far more optimistic than the others I’ve mentioned.
He sees the fed coming to the end of their rate cycle and that the crypto markets have reached a bottom in prices because the market prices in what could happen six months ahead. He says we could see a bottom in the market around March after the Fed’s meeting on interest rates.
Pal thinks Crypto is like a beach ball held underwater — the only thing stopping it from exploding is the lack of liquidity in the market due to interest rate increases and record inflation, which he says is nearing its peak.
Raoul Pal — Source
“The narrative you will see is that Marco is about to be terrible, so all assets must fall.
Look for the turn. In the next six months, the central bank will say, unemployment is coming up. Inflation is coming down.
If the rate of change stops, you stop the pressure on markets.
We are now at the bottom of the macrocycle, and the beach ball is being held underwater.
Remember that new people are building in the ecosystem daily, and there’s a new adoption.
When quantitative tightening or rate rises stop, the beach ball will rise above the water.
You can’t hold it down.”
Final Thoughts.
Sometimes when you think one thing will happen with the market, the opposite happens.
Everyone in the West at least thought the pandemic would result in the masses struggling financially to buy food and the stock market capitulation. Instead, we sat at home spending our stimulus checks on Crypto and online shopping, inflating the profits of online retailers.
Although people are divided on when the recession will happen or if we’re near a bottom in the market, one thing is clear — they all believe we’re not out of the woods yet, and more pain will come.
None of this matters if you’re dollar cost averaging into assets you view with a long-term lens.
Either way, you should be over the moon with the buying opportunity in front of you.
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.