Economic Recession! Will Crypto Survive? Everything You Need To Know!

Summary

This 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

00:00

📊 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.

05:02

🌐 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.

10:03

📈 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.

15:04

📉 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.

Keywords

💡Recession

A recession is a significant decline in economic activity that lasts more than a few months, typically visible in real GDP, income, employment, and industrial production. In the video, the speaker discusses the potential impact of an upcoming recession on Bitcoin and the economy, suggesting that understanding the recession's effects is crucial for positioning oneself financially.

💡Bitcoin

Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries. The video discusses Bitcoin's potential as a hard asset to invest in during a recession, comparing its role to that of gold during economic downturns.

💡Liquidity

Liquidity refers to the ease with which an asset can be bought or sold without affecting its market price. In the context of the video, liquidity is discussed as a key driver of Bitcoin's price action, with the speaker suggesting that global liquidity trends are critical to understanding Bitcoin's valuation.

💡M2 Money Supply

M2 Money Supply is a measure of a country's money supply that includes cash, savings deposits, and other time deposits. The video emphasizes the importance of tracking M2 Money Supply to understand the correlation between the money supply and the valuation of assets like Bitcoin and gold.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The video discusses how increasing liquidity can lead to inflation and how this can affect the value of Bitcoin and other assets.

💡Purchasing Power

Purchasing power refers to the amount of goods or services that can be purchased with a unit of currency. The video stresses the importance of considering the purchasing power of Bitcoin rather than just its nominal value in US dollars.

💡Correlation

Correlation in finance refers to a statistical relationship between two variables, in which a change in one variable is associated with a change in the other. The video explores the correlation between Bitcoin's price and various factors, such as global liquidity and M2 money supply.

💡ETF (Exchange-Traded Fund)

An ETF is a type of security that involves a collection of securities such as stocks that often track an underlying index. The video mentions the launch of a Bitcoin ETF as a factor that could increase liquidity in the Bitcoin market, making it more accessible to institutional investors.

💡Safe Haven Asset

A safe haven asset is an investment that is expected to retain or increase its value during times of market turbulence. Gold is traditionally seen as a safe haven asset, and the video suggests that Bitcoin could serve a similar role, especially during economic crises.

💡Monetary Policy

Monetary policy refers to the actions of a central bank, such as the Federal Reserve in the United States, intended to influence economic activity, primarily by adjusting the money supply and interest rates. The video discusses how monetary policy decisions, such as rate cuts and quantitative easing, can impact liquidity and, by extension, Bitcoin's price.

💡Depression

An economic depression is a severe and prolonged downturn in economic activity. The video draws a parallel between the economic conditions of the 1930s and the potential future, suggesting that Bitcoin could become a sought-after asset during a depression, similar to how gold was during that era.

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