Nov 29, 2023

Bitcoin (BTC) broke above $38,000 as hopes around a spot ETF approval were revived earlier this week and traditional market watchers anticipate rate cuts.

Video transcript

It seemed like it was only yesterday that Bitcoin was trading at $36,000 in change. Oh, wait, that's right because it was almost, yeah, it was just yesterday now. It's over 38,000. Why is that? Is it a little bit of dovishness? Let's find out joining us now to discuss the crypto markets is tact of wealth Advisor Eddie Gifford. Welcome back, Eddie. Hey guys, thanks for having me. Glad to see you again. So, uh 38,000 here, a little bit of bullishness. A lot of bit of bullishness. Why I, I would almost think that it has something to do more with, uh, the, the potential for some, I don't know, easy money flowing around and sloshing around that market more so than even the ETF, what do you think? Yeah. You know, anytime that the fed hints at rate cuts in general, what that's doing, that's, that's unleashing liquidity into the system. And when that happens, we see risk assets tend to just creep up or even explode to the upside and, and uh, we're seeing a little bit of that in Bitcoin. We're also seeing uh a lot of that in some of the alt coins. Uh, the, the, the interesting thing about it though is I've been watching it, especially over the last week is that on the days that the markets are up, Bitcoin is, uh, tended to be flat, but on the days where the markets are flat and we see gold kind of pushing up. We're seeing Bitcoin go up, just go up by more. So I'm looking at this as kind of like a double edged sword. This could be like, hey, Liquidity is awesome. Let's let's go get some Bitcoin because uh you know, that's gonna push the value up. But then at the same time, uh the way it's kind of mimicking the behavior of gold, it makes me wonder is this kind of a warning of like, hey, maybe Bitcoin is now the safe haven trade, at least for the under forties, right? So, uh we, we're definitely watching this very closely. II I have no doubt that if we're looking at like salon or avalanche or link that uh that's, that's just pure uh speculation or just looking straight for growth. But Bitcoin, I'm not so sure anymore. I think Bitcoin might be establishing itself more as kind of like a reserve uh type scenario. It's just a reserve scenario that can double in a year like this. So uh it's not a bad spot to be, that's for sure. Well, we, we, we'll get to those results in a second. But, uh, kind of about the macro situation and you mentioned the idea that, uh, uh Bitcoin is serving as digital gold for, for folks who were, uh, uh, you know, born a little too late for, um, you know, uh listening to the Arris. So, um, I generally, uh, do you think that it's a situation that the, the, what Bill Ackman is saying now? And, and Chris Waller is, as we just discussed the fed governor saying that, oh, you know what, maybe, maybe the, this whole rate hike thing is, is just about done. Uh Or do you think that perhaps that the other fed governors might have it in them to say? Yeah, let's give it a couple of more here. Uh We, you know, we saw some issues now with selling bonds uh in, in the market, uh the, the, the, the treasury trying to sell bonds and having a tough time finding buyers that of course, brings up interest rates because fewer buyers of bonds means that the yields go up. It does this, uh do we have more rate hikes ahead or, or do the doves have it? Uh Have you have the upper hand here? I don't think we have more rate hikes ahead unless we see some real surprise to the upside with inflation. I mean, gas has fallen like 60 days straight. So we've seen inflation come down. Uh Of course, that's relative because it's still higher than uh prices are still higher than they were a year ago. But, uh, the rate has slowed. Uh, so I, I don't necessarily see any hikes. Uh, do I expect a cut, you know, in the next month? No, II, I think that they're gonna try to hold steady for as long as they can. The fact that they're even mentioning potential cuts or the fact that everybody is, is calling for cuts. A lot of those people are, are, are, are like the big guys and, and you know what that tells me is they're seeing something that they think is broken in the system because usually you don't get cuts until something's until something breaks. It's, it's very, very rare. I don't think it's actually, I don't think it's ever happened where the fed is actually cut before something bad happens. So, uh, that's kind of the thing that we're concerned about is, hey, wait, there's certain top cuts but where markets are near all time highs, like what's, what's gonna give here, what's, what's going on? And, and so, um, I think that the, the, the doves are, are there because they're scared of something and, and, uh, I don't know what that is but, uh, usually it has something to do with the credit event. So, uh, we'll see how that shakes out. Let's, let's turn now to some of those ALTs. I know you're watching Soul Avax and Link. There's been some interesting movement with all three of those alt coins in the last little while. What are you seeing? Well, we just really pay attention to trend strength and the amount of momentum behind the coins when we're looking at, at this, we, we've, we, we, we still primarily trade uh rather than own when it comes to all coins. And so what we're seeing is, uh we, we, we've seen a lot of going on behind Seoul for a long time. Uh We just saw avalanche overtake link uh last night actually and executed a buy signal. And so, you know, if we've learned anything this year from anything, it's that take the stuff with the wind behind it. I mean, that doesn't mean if we're, it doesn't matter if we're talking about Bitcoin, if we're talking about alt coins, if we're talking about NVIDIA, if we're talking about A I, all these things that couldn't possibly go higher because they were, they were so high, you know, shot to, to new highs like uh and, and not just a little bit a lot. Uh So what we've been trying to focus on is finding, hey, where's the money flowing? How, how strong the trend, how strong is the trend behind it? And let's, you know, it's OK to get in and, and write it up a little bit further uh and just be disciplined with your trading strategy. Speaking of things, shooting to new highs, you know, we love a good prediction on this Show and Standard Chartered recently said that they believe Bitcoin could hit $100,000 by the end of 2024. What do you think? Do you think that could happen? I don't think it's out of the realm, especially if we end up getting the approval in the first quarter for the spot. ETF, which just so happens to coincide with the having. Uh and then, you know, we've already seen it. There's a lot of uh uh uh there's a lot higher adoption now. It's so funny. I have like reviews with clients and I'm like, ok, so let's just take an inventory of this stuff that, that uh maybe you've accumulated and everybody seems to have some Bitcoin now and I'm like, I never thought you would own Bitcoin. But, ok. No, that's great. Uh You know, the, the, the only thing that could really like derail that is if something does break next year, if we do see some type of Black Swan crash type event, I think other than that, if things kind of continue on the trajectory that they are, uh you know, 80 to 100,000 is definitely not unreasonable by the end of next year. Some economists have been calling for that Black Swan event. Do you think we're going to see one next year? It sounds like maybe there's definitely cracks under the surface. I think that, you know what the, what the administration has shown us though? Is, they're really good at kicking the can down the road. So, ideally, I think if something breaks, they want it to break after the new guy gets in. Uh, so, so after the election, uh, whether it's a new guy or the same guy or whatever, but they want it, they, they wanna blame it on whoever is in next. They don't want it to, they don't want it to have to do anything with what's happened over the last four years. So, uh so, uh I think that that they're gonna do everything in their power to make sure that if anything happens, it happens after the fact. Now the reality is sometimes these waves just swell up so big and they just destroy everything no matter what, even if, even if they are trying to kick it down the road, uh we're not seeing, uh we're not, we're not seeing anything breaking yet but the cracks on the service are there. The consumer is stretched that there's still a lot of demand, but a lot of that is going on the on the credit card and you know, when you have higher interest rates and the higher credit card balances and higher auto payments and higher mortgage payments like that stuff stacks and it makes it harder and harder to pay your bills. So we could be developing into some type of waterfall event that you know is gonna be like, oh, it was so easy to see in hindsight, but um I don't know when it's gonna happen, but I definitely think that it is gonna happen, unfortunately. All right, Eddie, we are gonna have to leave it there. Thank you very much for joining us this morning. Always a pleasure hearing your insights. Appreciate it. Thank you. That was Tact of Wealth Advisor, Eddie Gifford.

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