Economic Recession! Will Crypto Survive? Everything You Need To Know!
Summary
TLDRThis educational video discusses the potential impact of an upcoming recession on Bitcoin and the importance of investing in hard assets like commodities, cash, and crypto. The presenter analyzes global liquidity trends and their correlation with Bitcoin's price action, suggesting that understanding liquidity is key to predicting market movements. They also compare Bitcoin's valuation against M2 money supply and S&P, indicating Bitcoin's potential as a safe haven asset in times of economic uncertainty.
Takeaways
- 🌐 The video discusses the impact of a potential recession on Bitcoin and the importance of investing in hard assets like commodities, cash, and crypto.
- 📉 The presenter is conservative, anticipating a disastrous recession characterized by global tension, populism, and widening wealth gaps.
- 💡 The video emphasizes understanding global liquidity as crucial for predicting Bitcoin's price action.
- 📈 Bitcoin's price is believed to correlate with global liquidity; past stagnation in liquidity has negatively impacted Bitcoin's price.
- 💰 The US has seen a decrease in liquidity, which contrasts with China's increase, affecting the global economic landscape.
- 📊 The presenter suggests looking at valuations against the M2 money supply to understand asset performance, including Bitcoin.
- 🔑 M2 includes cash, checking deposits, saving accounts, and other readily convertible deposits, making it a key indicator of liquidity.
- 🏛️ Central banks' actions, like the FED's quantitative easing and rate cuts, are expected to increase liquidity and potentially boost Bitcoin's value.
- 📉 The video points out that Bitcoin has historically performed well during periods of monetary expansion and poorly during stagnation.
- 🚀 The presenter anticipates a significant bull market for Bitcoin, driven by an upcoming recession that will force central banks to expand the money supply.
- 📅 The video suggests that the next peak of Bitcoin could mark the beginning of a new economic depression, drawing parallels to historical financial crises.
Q & A
What is the main topic of the video?
-The main topic of the video is the potential impact of an upcoming recession on Bitcoin and the importance of investing in hard assets like commodities, cash, and crypto.
What does the speaker suggest about the correlation between Bitcoin and global liquidity?
-The speaker suggests that Bitcoin's price action is heavily influenced by global liquidity, with periods of liquidity expansion correlating to increases in Bitcoin's valuation.
What is M2 money supply and why is it important in the context of the video?
-M2 money supply includes cash, checking deposits, saving accounts deposits, and other deposits readily convertible to cash. It's important because it helps in understanding the price action of Bitcoin and other assets by showing the correlation between asset valuations and the money supply.
How does the speaker link the concept of liquidity to the price action of Bitcoin?
-The speaker links liquidity to Bitcoin's price action by explaining that an increase in global liquidity often leads to an increase in Bitcoin's value, as more money chasing the same amount of Bitcoin drives up its price.
What historical periods does the speaker reference to support the correlation between liquidity and Bitcoin's price?
-The speaker references the periods of 2014-2018 and the 1970s to 1980s, noting that during these times, liquidity expansion corresponded with significant growth in Bitcoin's valuation and gold prices, respectively.
What does the speaker mean by 'the perfect storm' for Bitcoin?
-The speaker refers to 'the perfect storm' as a combination of factors including a potential recession, monetary expansion, social unrest, distrust in financial institutions, and the presence of Bitcoin, which could drive its value significantly higher.
What role does the speaker believe Bitcoin will serve in the future?
-The speaker believes that Bitcoin will serve as a safe haven asset similar to gold during times of economic uncertainty, and it will be particularly valuable during the next economic depression.
What is the significance of the ETF launch mentioned in the video?
-The ETF launch is significant because it broadens the amount of liquidity that can flow into crypto, including Bitcoin, by providing institutional investors with a regulated way to invest in these assets.
How does the speaker suggest valuing Bitcoin in times of inflation?
-The speaker suggests valuing Bitcoin against the M2 money supply to understand its purchasing power during inflation, rather than just looking at its value in US dollars.
What does the speaker predict for the next peak of Bitcoin and why?
-The speaker predicts that the next peak of Bitcoin will be the start of the next depression, as economic uncertainties and the search for safe havens will drive its value up significantly.
Outlines
📊 Understanding the Impact of Recession on Bitcoin and Hard Assets
In this video, the speaker introduces the topic of how a recession can impact Bitcoin, commodities, and cash. They emphasize the importance of investing in hard assets during such economic downturns. The speaker asks viewers for their opinions on Bitcoin's future price and timing. The introduction touches on growing societal and political tensions, widening economic inequality, and the significance of understanding global liquidity for positioning oneself well in the market. This video is the first in a series focusing on economic factors and their effects on markets like real estate, Bitcoin, and more.
🌐 Global Liquidity and Bitcoin's Price Action
The speaker explains the correlation between Bitcoin’s price action and global liquidity, especially how the liquidity levels of major countries like the US and China influence Bitcoin. They note that the US has seen stagnating liquidity, while China has increased liquidity. This liquidity is tied to inflation, with higher liquidity usually leading to inflation. The speaker describes the importance of understanding M2, a measure of money supply, and how changes in liquidity influence scarce assets like Bitcoin and gold. Historical trends show that liquidity drives price growth, and Bitcoin has reacted similarly to gold when it comes to supply changes.
📈 The Role of M2 Money Supply in Predicting Bitcoin Bull and Bear Markets
The speaker dives into historical data showing how Bitcoin's price has been influenced by periods of liquidity expansion and contraction, similar to gold. They describe how Bitcoin's previous bear markets, particularly in 2014 and 2018, were linked to liquidity stagnation rather than its 4-year cycle. They highlight the role of ETFs in expanding liquidity in the crypto market, stressing that understanding liquidity helps predict future bull and bear cycles for Bitcoin and other hard assets. The speaker encourages looking beyond typical valuation models and incorporating liquidity data into market analysis.
📉 Longest Bear Market and the Potential for the Longest Bull Market
Here, the speaker discusses how the current bear market is the longest Bitcoin has ever experienced, largely due to stagnant global liquidity. However, they predict that the eventual expansion of liquidity, driven by economic recession and central banks’ monetary policies, could trigger the longest bull market in Bitcoin history. Recessions often lead to monetary expansion, which could boost the prices of hard assets like Bitcoin and gold. The speaker compares the current situation to past cycles where liquidity expansion fueled market growth and highlights that Bitcoin's role as a hedge against inflation and economic uncertainty will drive future price action.
⚖️ Bitcoin's Valuation and the Influence of Market Liquidity
The speaker argues that valuing Bitcoin against the US dollar is insufficient because of the fluctuating liquidity in the market. Instead, Bitcoin should be valued against M2 and the S&P 500 to get a better sense of its performance. They reference previous liquidity expansions in 1971 and 2001, which led to significant market growth for gold, drawing parallels to the current situation with Bitcoin. They predict that a recession and increasing liquidity will create the 'perfect storm' for Bitcoin's rise, likening its potential future role to that of gold during the 1930s Great Depression, where people sought safe havens outside traditional financial institutions.
🌪️ The Perfect Storm for Bitcoin's Growth Amid Economic Turmoil
In the final part, the speaker outlines why the current economic environment, marked by high inflation, recession fears, and increasing liquidity, is creating ideal conditions for Bitcoin's growth. They point to institutional investors entering the market through Bitcoin ETFs and the global distrust in financial institutions as factors driving demand for decentralized assets like Bitcoin. The speaker forecasts a dramatic rise in Bitcoin's value, potentially reaching between $300K to $600K during the next bull cycle. The video closes with a call for viewers to stay tuned for more educational content on financial freedom and altcoins.
Mindmap
Keywords
💡Recession
💡Bitcoin
💡Liquidity
💡M2 Money Supply
💡Inflation
💡Purchasing Power
💡Correlation
💡ETF (Exchange-Traded Fund)
💡Safe Haven Asset
💡Monetary Policy
💡Depression
Highlights
The video discusses the impact of recession on Bitcoin and the importance of investing in hard assets.
Bitcoin's price is likely to be influenced by global liquidity and economic policies.
Two scenarios for Bitcoin's price action are presented: correlation to global liquidity and political events.
US liquidity has been stagnating, which negatively impacts Bitcoin's price action.
China is increasing liquidity, which could positively affect Bitcoin's price.
The US may need to continue quantitative easing due to high debt and inflation.
Understanding liquidity is key to predicting Bitcoin's price movements.
M2 money supply is a crucial indicator for valuing Bitcoin and other assets.
Bitcoin's price has historically correlated with the expansion of the monetary supply.
The video suggests that Bitcoin could be undervalued against the US dollar and M2 supply.
Bitcoin's valuation against the S&P 500 indicates it is undervalued compared to gold.
The video anticipates a potential long bull market for Bitcoin due to the longest bear market ever witnessed.
A recession could lead to monetary expansion, benefiting Bitcoin and other hard assets.
Bitcoin is positioned as a safe haven asset against economic uncertainties.
The current market conditions are compared to the period before the 1929 crash, suggesting a significant role for Bitcoin.
The video predicts a massive bull cycle for Bitcoin, with potential price ranges of 300k to 600k.
The video concludes that the next peak of Bitcoin might signal the start of a new economic depression.
Transcripts
in this video we are discussing what is
going to happen when there is a
recession it's an educational video
where I'm going to be explaining data
and what is likely going to occur for
Bitcoin and why I think that being
invested into hard assets like
Commodities cash and crypto is a must to
do at this point by looking at the data
my question to you is before we continue
where do you think Bitcoin is going to
peek out and when will that be taking
place leave it behind in the comments
beneath now let's get started with this
educational
video as you know um I'm quite
conservative which means that I think
that the upcoming recession is likely
going to be disastrous in which you can
already see that the world is changing
in a negative way uh populists are
getting the power in countries anger
between people or groups in Society is
getting worse um the gap between rich
and poor is increasing so you can feel
the tension across the globe and that's
why I think that this topic is so
important to understand to position
yourself well through which you can stay
away from all the troubles that are
taking place and you can stay focused on
the real picture so we want to share
some more knowledge behind our thesis of
what we are likely going to be expecting
and this is basically the first
educational video where we want to make
more content on Ubi or what the politics
are doing or the impact of a crisis real
estate markets it's all going to be
there but this is the first one and it's
going to be about global liquidity in
the world and I think that this is by
far the most important topic to
understand because understanding
liquidity means understanding the price
action of Bitcoin I think there are two
scenarios when it comes to the price
action of Bitcoin the first one is it's
correlated to the whole thing and the
impact of the whole thing you can also
say it's correlated to elections because
after elections bitcoin's price go up or
it is correlated towards the liquidity
in the world and we know that in the
past two years the overall liquidity has
been stagnating um the US has actually
been going down which means that that
has doesn't have a positive impact on
theice PR action of Bitcoin currently we
see that China is increasing liquidity
because they come out of a very terrible
period for the economy treasury BuyBacks
from the FED is taking place and in
general the amount of depth that the US
has is astronomically High which means
that they need to do rate cuts and also
need to continue doing QE because the
inflation will likely continue to pick
up momentum as they have been increasing
their liquidity you need to realize that
increase ing liquidity almost always
equat um increase in inflation if you
don't expand that then the inflation
will also not be expanding at all so
when we look at Price action you want to
look at valuations against the
M2 um so for instance as you can see you
want to see the price correlation
between gold values in the US dollar and
the M2 supply of the US dollar first
before we continue we like to explain
what M2 actually means and there are
several versions of the overall supply
of money in the world you've got M1 M2
and
M3 M1 is cash checking and saving
accounts deposits so that's the smallest
version of the money supply M2 is cash
checking deposits saving accounts
deposits and other deposits readily
convertible to cash so anything related
to it um that's basically the trick
because M2 is very easy to manipulate
you can do any sorts of Treasury bonds
and then it will be valued at the M2
Supply which technically is not really
adding cash to the
market M3 is everything of what we just
discussed including large institutional
cash deposits so theoretically you could
say that if the amount of money is being
increased then other assets that are
scarse are likely not going to um drop
in terms of price value so in that case
it's also true that valuing an asset
against US dollar doesn't really make
any sense and I often say if at this
point one bread costs $1 and one Bitcoin
is valed 100k then if that brat is going
to cost $10 in a year from now and
Bitcoin is worth a million then there is
nothing won by the increase of price for
Bitcoin um it's all about purchasing
power so you need to look at different
charts and in this case you need to look
at the M2 for instance it's also true
that if um if you have the equation of
Bitcoin against US dollar that Bitcoin
doesn't have a substantial increase in
um amount of Bitcoin that will be
released or available on the market but
the US dollar is quickly moving around
so if the amount of USD is going to be
increased then it's very likely that the
scars asset is going to be valued higher
because there's simply less of those
it's a very standard way of um
interpreting the charts through which if
you look at the chart of gold and you
look at gold versus the M2 Supply you
can see that gold has been doing great
in terms of um expanding of the monetary
Supply which means that during the 1970s
to 1980s it has been doing great and
also since 20 ,000 gold has been doing
great now if we look at Bitcoin we can
also say that there's a strong
correlation between expending the supply
and the growth of the valuation of
Bitcoin we can actually see that since
the moment that there was Supply
increase that Bitcoin has been in uh
rallying in price during 2014 and 2018
there were periods of consolidation when
it comes to the money supply and those
were also periods where Bitcoin suffered
in terms of price action
so we could be saying that the bare
market for Bitcoin wasn't influenced by
anything related to the Hing or 4year
cycle but it was pushed there by the
politics or um sanctions or rules that
were created surrounding the supply in
general this cycle is kind of different
as we've seen that the ETF launch has
been taking place which broadens the
amount of liquidity that can be going
towards crypto but but overall it is
still copy pasting the previous periods
where liquidity has not or has been
increased so by knowing this we also can
time Bull and bare markets for crypto
and hard Assets in general the first
question you need to ask yourself is why
is this important well I mean if we all
analyze the fact that we've got the
Bitcoin Hing and are completely focused
on that variable at some point will be
wrong so you need to be open for
different techniques of valuing an
assets and I think that doing that by
focusing on liquidity and actual data
that helps there is a better way of
navigating through the cycles so in that
aspect we want to look at a case of
understanding um liquidity additions or
not and if we look at the charts that
that we have on screen here then we can
also copy paste the bare and bull market
of Bitcoin as I just discussed what we
see here it's a website which is called
macro micro where you can see the major
Central Bank M2 money supply we just
discussed that and the important part is
you need to that you need to remember
why Bitcoin has been consolidating in
some sort of side action what we can see
here is that since January 2014 all the
way towards September October
2015 the money supply was pretty much
stagnant which means that there was
basically no no um additional liquidity
being added to the world quite frankly
this was also the period where Bitcoin
stagnated in terms of price action and
after that we saw a quick expansion
leading to a case where Bitcoin did
extremely well now if you look at the
period since January
2018 it was also the period where
Bitcoin peaked at 20K and dropped
towards 3K in the year of 2018 but we
can also see that the liquidity was
going sideways until October 2019 when
it started to break out and when the
bull market started to happen so in that
period we had a bare Market in the
current period we can see that this
expansion took place until yes correctly
January 2022 December
2021 we know that the Bitcoin Peak
happen in November 2021 and since then
we've had a rough period and you can see
that in the liquidity until now we've
been basically have seen no difference
zero which means that we have been in a
bare Market since that moment and if we
look at the altcoin price action we have
been in a bare Market since that moment
there hasn't been any Bull and if we
compare that to the data points that we
can see here it's actually the longest
bare Market that we have witnessed so
the moment that the expansion starts to
take place that's going to be the
trigger where Bitcoin starts to do well
that's going to be the trigger where
altcoins start to do really well now if
we have this thesis then we can also say
that from this perspective that
liquidity is the one that's driving the
markets and based on the fact that we've
just witnessed the longest bare Market
ever we might also anticipate the
longest bull market ever um and that a
recession might actually be good for the
markets because recessions are periods
of expansion for the money supply they
might be GI giving a shock at first but
overall they fuel the economy and it's a
a period where um central banks are
pushed to increase the money supply to
fight or combat a negative economy or at
least be make it it more or stimulate
the economy even more which means that
we've had those signs in the previous
years or in the previous periods
expansion took place Bitcoin did really
well 2014 2015 was a period of a slight
re session after that we've seen that
there was more monetary expansion taking
place so if we do know that and we know
the fact that currently the money supply
is increasing then we might be
indicating that we're expecting and
experiencing upwards momentum for hard
assets like gold and
Bitcoin then if we have that thesis then
we can also conclude that Bitcoin is
acting as gold and it's heavily
correlated towards gold as gold is a
safe haven against monetary expansions
or inflation Bitcoin is an edge against
big economic uncertainties um and there
is a very likely case that in the coming
years it's going to be one of the
biggest war Cycles as the expansion is
just going to increase and increase so
is there a sign that we are having lower
Market expectations at this point yes
the label markets are extremely
weakening at this point uh we can also
see that the interest and overall trades
are weakening at this point so overall
the first signs of a recession are
taking place then the final thing is
that valuing Bitcoin against the US
dollar doesn't make sense because if you
look at it from the current perspective
we seen that we had a new all-time high
uh preing and that was just generally
due to additions of liquidity as
institutions were able to buy Bitcoin so
it makes more sense to look at the
valuation of Bitcoin against M2 to see
whether the liquidity is being expanded
uh or you need to be looking at Bitcoin
against the S&P because S&P is
relatively more safe Bitcoin is a more
riskier asset and valuing it against the
S&P shows you whether something is under
or
overvalued in this case Bitcoin is still
heavily undervalued because if you look
at that shot it's still down 35% from
the all-time high we can also see that
gold
against the S&P is just barely breaking
out so looking at gold at a new all-time
high currently is not the right way of
doing it I think volume at the against
the S&P makes more sense based on the
fact that you know whether the S&P or
gold is under or overvalued and we've
seen two previous occasions where gold
was breaking out the first one is
1971 the second one is 2001 and this is
going to be the third one
both of them were periods of 10 years of
upward momentum where in
1971 it was started by the Nixon shock
the Nixon shock was basically removing
the gold standard from the US dollar
increasing the amount of liquidity that
we were going going to have and in that
period gold did absolutely insane
Returns the same for 2001 where gold was
valed around $200 until 2011 it did a X
in terms of assets so if you expect the
same to happen then you want to be
positioned into hard assets like gold
silver and Bitcoin especially if you
expect a big recession to happen I would
classify the current market for Bitcoin
as The Perfect Storm to happen we've got
the FED we've got the global liquidity
we've got a recession we've got extreme
right and left wing people against each
other social unrest no trust in
financial institutions and we've got
Bitcoin and I think that Bitcoin as it
valuation at this point is super
undervalued and if we look at that and
we look at the current landscape we've
had high inflation we are going to be
having lower inflation but it will be
picking up at some point again we've got
rate Cuts going to happen the FED is
eager to stimulate the economy economy
because the labor markets are weakening
and we've got people that are investing
into assets as they don't want to hold
dollars in their pockets anymore because
the dollar is losing value over time and
people have been hearing about high
inflation for ages so they want to
invest into something because investing
into the stock market and real estate
markets has been the best strategy as it
has been going up only um uh for like
years creating the biggest bubble ever
so that all combined is the perfect
storm for Bitcoin to do well and it's a
combination of factors that is very
remarkably comparable to the period of
1926 1927 where we've witnessed 1929 is
the big crash and then 10 years of
depression taking place after that where
as a sort of search for Safe Haven
behavior um people were going into gold
rather than um having their own money
into a bank and that is comparable to
what I expect to see happening with
Bitcoin I think that Bitcoin is going to
serve the role of gold of the
1930s then
additionally we also know that in 2021
we've had a Bitcoin run that went to
$69,000 s from FTX pushed us down we see
that in the liquidity that during that
period we still had expansions taking
place where likely Bitcoin was going to
go way higher than $69,000 but Sam was
losing money so he kept on shorting the
markets in uh trying to keep his company
afloat so we've got multiple ingredients
we've got the recession coming which
means monetary expansion and more
liquidity in the markets where China is
actually leading that behavior as China
is completely
toasted uh we see another addition which
is liquidity opening up for
institutional investors that want to get
into Bitcoin through the ETFs which has
opened their doors toward ours
institutions we are going to be having a
period of massive changes in the world
with Ubi limiting our freedom and way
more where we are just being checked all
over on everything that we do online
offline through which I suspect that we
are getting into the biggest bull cycle
ever and that from September and October
onwards likely we are going to be
running to 19 to 100K at the end of this
year but likely we're going to be
running to anything between 300 to 600k
in this bull cycle given the factors
that we know and I think that the next
peak of Bitcoin will be the start of the
next depression thank you for watching
to this first edition of an educational
video it's not perfect but we're going
to get there we've got three new
chapters education portfolio and
altcoins let me know in the comments
beneath which one you like um next weeks
we're going to be continuing with these
series making more content for you on
your journey towards Financial Freedom
have a good day subscribe to this
YouTube channel and I'll See You Again
ciao
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