Right now even historically bullish crypto traders are worried about another
down leg. What do you see.
Well look at that since January. You know I've been pretty bearish of
Bitcoin. I was you know when I was 42 I was
targeting 30 to 30. I targeted 20.
And when I got to 20 I kind of took profits.
But then just last week we entered a short trade with a target of 15.
The one thing I do want to make clear is that I don't have really a fundamental
view one way or the other on Bitcoin. I suppose looking at as a percentage of
gold's you know the amount above ground gold's value.
You know what's only one way to look at it.
But I think to my mind the more abstract the fundamentals the more important
technical analysis is we do now have you know 10 years a little bit more than 10
years of trading history. Right.
And so what really got me bearish was really again nothing to do with you know
a fundamentally bearish view or fundamentally bullish view.
It was simply the fact that longer term momentum was really starting to break in
in late January. And this one particular signal I was
focused on. You know it had done this three times
prior. And each time Bitcoin corrected 60 to 70
percent over the next. Anywhere from four to sort of 10 month
period. And you know right now you know we went
from 40 to just when that signal developed in January.
You know that would bring you down to about 15000.
But I actually think there's an enhanced high there.
Do you buy there Mike. I remember when it went from a thousand
to seventy five. And people said this is the end.
Then we went of course at seventeen thousand when we dropped from there to
three grand everyone said this is the end.
Then we went to sixty five thousand. We dropped from there to 20.
You're saying 15. Do you get in there.
I'm not. You know I think I'll cross that bridge
when we come to it. It depends how we get there and what's
sort of happening you know more broadly. But there is one important thing about
this 20000 level the ground number of 20000 which is if you remember a couple
of years ago when we sawed through 20000 and we took out that 2017 high that kind
set the set the path to the lifetime highs of 60 65 66.
That that concurred with basically a lot of institutions coming around and saying
hey you know we're taking Bitcoin seriously now like we're making
allocations or at least considering making you know significant out
locations to to Bitcoin or to its ilk. And I guess one of the problems I have
right now just in terms of flows coming into Bitcoin is that what we've learned
over the last years that Bitcoin is not on is it hasn't been uncorrelated.
It shares a reasonably high correlation with the NASDAQ or the broad you know
other risk assets. And so I really question you know since
it hasn't demonstrated its ability to to be uncorrelated I question whether
institutions are going to come in and say hey you know if it gets to 15 or
gets to 17 or 18 or twelve whether they're going to go rush back to
committee and say hey here's a dip we can buy because the thesis back three
years ago I think was you know generally that hey this is an uncorrelated asset.
It can beat inflation hedge. It's a speech on topic here.
Speaking of uncorrelated assets let's put this in the context of the Federal
Reserve here. It's all about rates at the moment.
How do rates and crypto correlate or don't.
Well you know I was just just early this morning.
You know if you look at the NASDAQ that that is a pretty clear correlation with
rates. And Bitcoin has a pretty clear
correlation with with the NASDAQ here. Right.
And so I think the weather look if you looked at a lot of stuff that really got
inflated you know post Covid shock in the spring of 2020 you know with this
massive you know suppression of interest rates massive w Covid from the Fed you
know you can ask a lot of speculative tech stocks going to be very very
aggressive levels. Well Bitcoin was also part of that as
well. And so I think it is going to be very
vulnerable to. You know that hawkishness and the you
know one issue is is that because it's again I come back to this thing that it
hasn't demonstrated its utility as an inflation hedge.
So a question you know if you really just need a levered play on the NASDAQ.
Well there's a whole lot of ways to do that.
Right. And I think the the question about how
you really value bitcoin at fifteen thousand or ten thousand it's going to
be really really problematic rapidly. If you talk if you are saying that is
not doing his job as a leverage player he means inflation hedge.
Then once you actually do with bitcoin do you just not buy it or do you
actively shorten it. We've got about 30 seconds here.
I ought to answer your question succinctly.
I am. I'm short it.
But again I'm looking really at technicals here.
I. I sort of sidestepped the fundamental
discussion because I don't think I'm honestly not sure really how to analyze
the fundamentals of it. So I kind of just look at it.
It's an important asset. But it's what's clear is is that bumps
down room mentum. From a longer term perspective is very
bearish right now. And so I'm just kind of riding that
trend.