This has been a wild week you've uh had Uh a few of those in your time in the Crypto market where does this one rank Oh it's actually right on the weighted Average um there been about six big Price cycles in kryptos since we started Uh 10 years ago and the average has been A 62 bear market and we're literally Right on that right now So my instinct having seen a lot of These cycles is we've pretty much done All we need to do And the markets can get going back up Again you know your website dan has Mentioned that you guys are actually a Investor in anchor protocol which it has A relationship to terra ust and luna so How are you being impacted by the moves That we've seen this week Yeah we've been invested in several of Tara's projects over the years since 2020 i guess And we're investors so we buy things When we think they're cheap and then Once they've achieved full value we sell Things and so we don't have any Positions right now in any of those Projects Dan let's broaden out here you wrote a Letter earlier this month and you said That this might be the last time in History one can buy bitcoin that cheaply You got bitcoin trading i'm just gonna Very quickly check the prices here
Bitcoin trading uh with a 29 000 handle Are you buying the dip yeah so we're Fully invested we think it's a great Time to be long and the point was most Markets just kind of cycle around and The joke and our investor letters i was Trading dollar yen for 35 years and it's Literally where it was when i started in Whereas crypto may never be at this Price again All right dan let's dig a little deeper Just into some of the market dynamics You made a reference to sort of the Historical patterns with crypto trading Uh and last time you were with us i Believe in march you were talking a Little bit about the co-relation when You see a lot of stock market selling When the s p 500 is under pressure it is Inevitable that you'll see that crypto Pressure looking back at 2020 Very quick dip More than a dip a 30 slide for the s p 500 uh and if you stretch it out a Little bit earlier and then a bottom a Little bit earlier The price of bitcoin came down about 50 Percent now this time around we were Talking yesterday about how the s p 500 Was on the doorstep of an official bear Move the correction in crypto we started To see Last year And based on that measure we'd already
Come down about 50 what would you say About how crypto is trading now when it When it compared to the stock market Yeah so i'd say that i think that Correlation has to break down soon um in The six Down drafts in the s p when bitcoin's Been trading over the last 10 years the Correlation has been very high but only For 71 days on average This time it's been four months so it's You know twice as long obviously it's a Much bigger impact on the s p so i think Pretty soon they're going to decouple And when you really think about the Driver the driver's higher rates which Is driving bonds down driving stocks Down But crypto doesn't really have any Impact from from rates so i think it'll Start trading with other things like Gold or oil or commodities that really Just aren't related to the interest rate Markets Let's talk about interest rates for a Second because you've been pretty Critical here and a lot of your letters To investors dan about the federal Reserve policies you've called the bond Markets upon ponzi scheme you said the Fed has manipulated the bond market as We look to quantitative tightening what Do you think the distortions are going To be for stock and bond investors
Yeah so the fed Ended up buying 6 trillion of bonds and Mortgage-backed bonds And that is essentially funding people To go out and buy a house and with Mortgages at two and a half percent Where the fed drove them to And the case-shiller index of housing Going up 19.8 percent the fed's Basically daring you not to buy a house Right so With that it created a huge boom in Housing a record amount of americans Took out mortgages last year it's 1.6 Trillion the wild thing is the fed Actually did more than 100 of that Lending itself the fed was basically the Mortgage bank for the united states last Two years uh and investors did what's Probably rational is borrow from Literally the fed and go out and buy a House it's going to take a lot higher Rates i think just to break that Psychology Dan in a previous life you're a goldman Bond trader so we got to talk about Bonds here it's pretty consensus that The bond bull market that we've come to Know is coming to an end what reverses That yeah so i think the important point Is there's no working age person that's Traded in a rising rate environment Careful you're speaking to a millennial Here
Well i'm 56 and i got to wall street six Years into the bull uh market and that Basically built everything out the next Few years i think rates are going to be Rising And yet you can't see the fed stopping Tightening until either the housing Market rolls over or unemployment comes Off what is even chair powell said an Unhealthy low Unemployment claims hit an all-time Record low only one out of a thousand People filed unemployment claims uh in The recent weeks so it we really are at An extreme you got to see the house the Housing market come off or the labor Shortage Get resolved before the fed stops Tightening And dan just to circle back to what you Were saying before maybe you start to See more of the trading aspects Similar to let's say gold similar to This reality of dealing with the Inflation in the higher rate environment Uh for those who are trying to figure Out why we saw such a big crypto decline At a time when there was this high Inflation in the first place could you Make a case that the weakness we had Seen already worked against the crypto Argument of benefiting from this Environment of uncertainty and inflation And higher interest rates
Yeah so i think that is a good point That when the fed was printing trillions Of dollars of paper money it was very Easy to say oh then that means crypto Has to go up because it's a fixed Quantity thing um with the fed not Printing any more money now and Potentially quantitative tightening There is this kind of instinct that that Also must be the reverse for crypto and So crypto should go down but i think When investors look at their Options to invest in space stocks bonds Real estate You know commodities They're going to come to the conclusion If they agree with me that the rates are Going to head towards five percent in The u.s that most of those other Interest rate sensitive sectors are not Going to be good they're going to want To put money in things like commodities Oil um bitcoin blockchain assets
