Transcription
Did we just miss the top? It's all over, guys. We're about to start a 4-year bag hold. Time to pivot—e-com, maybe OnlyFans? Anyway, but look, I still think there's a great narrative for the crypto markets to have a great finish to 2025, and I've got a few reasons why I'm still holding my Bitcoin. Okay, why I'm optimistic about the ability the markets turn around, why the best days this market are still to come. Stick around; we'll be breaking down the facts. Okay, you don't want to miss this.
Look, I get it, guys. Everyone's freaking out right now. Recession vibes are everywhere. Bad news bears; the charts are looking horrific. I get it. JP Morgan just jacked up the odds of a downturn, of a recession in the USA, to 40%, up from 30% start 2025. And the market, it's basically saying, "Yeah, we're screwed. Get out now, run away." The S&P 500 has cratered down to 5,500 at the time of recording this, from above 6,000 not that long ago. Technical correction zone; it's showing so far not much sign of a strong bounce-back. Nasdaq looks even worse, man. Fear, panic, anger—the sentiment is terrible right now. Bitcoin's no better; your dog coins are basically—took the dogs out back and shot them, man. Bitcoin went down to under 80k, actually, from the $109,000 top just a short two months ago. All those Lambo dreams? It's gone—spitting on our dreams of, uh, sailing the yacht, living the life. Okay, but why be bullish? Is there any hope? Is this just a big scare in the market?
Trump said he doesn't see a recession coming; the US is about to go into a big boom period. You can't really believe politicians, right? But instead, let's look at the macro, the big picture, and here's what I'm seeing. See, history is not just for dusty textbooks; it's a playbook of human emotions playing out in real time in the markets. Rewind to 1987; you'll spot a different pattern whispering that the market might be gearing up to climb higher—way higher. Sure, Bitcoin wasn't even a gleam in Satoshi's eye back then, right? A kid back in those days. But with it shadowing the S&P 500 these days, maybe, just maybe, those old lessons can apply to crypto too. Because realistically, the price of Bitcoin is very strongly tracking the stock markets.
So let's go back to 1987. Black Monday was the headline on October 19th. The S&P 500 nose-dived 20% in a single day. That's crazy, man. If crypto existed, we would have seen a bloodbath of unimaginable proportions. But rewind a bit before that crash. Bonds were screaming a story. The two-year treasury yield, the short-term pulse of borrowing costs, was howling 9% by September. It's crazy, man. Inflation was simmering between 4 and 5%—much higher than it is right now—but still, inflation concerns were rampant. The Fed was tightening the screws, which sounds a little like '22, '23, doesn't it? A little bit. Money was getting pricier; markets were on edge; everybody's afraid. Then the plunge hit. Those yields flipped fast. By year-end, the 2-year had dropped to 7.5%. Panic sent investors scrambling into bonds; prices spiked; yields sank. And the Fed didn't sit idle, either. They slashed rates to 6.25%, 6.75%, and opened up the cash taps. Liquidity flooded back. The S&P 500, well, it finally caught its breath in late 1987 and charged 12% higher in 1988. Chaos didn't bury the market; actually, it built a launchpad. The extreme fear conditions were the launchpad.
Now look at today. Two-year yields are softening again, easing off recent highs. That's not a warning bell tolling the doom of an Armageddon of the markets; it's probably the starting gun for the next leg of the market. The next signal is oil, but before we talk about oil, we have to give a quick shout-out to today's sponsor: Loaded Lions. Have you heard about these guys? They just launched a new token, and if you are a crypto.com user, you should definitely be listening up. So the Lion token, only a little more than a week old, it's already on Solana, Arbitrum, Kronos, where it was born. Loaded Lions are bringing together cool art and real utility. The flagship NFT collection of crypto.com, Loaded Lions is a powerhouse brand with all kinds of utility for holders. So holders get exclusive perks, bonuses, and Loaded Lions main city game, special giveaways, major sporting events like ringside seats for the UFC and stuff like that, access to premium int and specific exclusive benefits within the crypto.com app, allowing you to earn more and get preference. Now they've launched the Lion token, which is powering the Loaded Lions ecosystem with impressive staking rewards available on crypto.com, so earn program, DeFi staking vaults, and Lion again, packed with utility because they have all kinds of big plans for this entire ecosystem. Again, if you're a crypto.com user, you have the crypto.com Visa card, you should be listening up. So they've already got plans to integrate the Lion token into the crypto.com Visa card for even more rewards and great features, so definitely worth noting there. Plus, they're going to bring that to the Loaded Lions main city game, governance features, all kinds of fun stuff in the future. If you want to learn more about some of these exclusive benefits that you can get from either holding the NFT or the tokens, especially for crypto.com users, then there's a link down below in the description; go check it out. All right, now back to it.
And of course, the story is all about "Drill, baby, drill," America. Oh yeah. 1987, West Texas Intermediate hovered around $18 to $20 a barrel. That was dirt cheap, thanks to OPEC pumping like there was no tomorrow. Then Black Monday hit; demand wobbled. By year-end, oil was scraping the bottom of the oil barrel around $17, sometimes even dipping below. The low prices in jittery markets sounded like a death spiral, but it wasn't. You see, low oil prices actually mean it's much cheaper to do things in the economy; it greased the economic gears. It was a lot cheaper to do basically everything—run your tractors, deliver, drive your delivery trucks, drive to work. Cheaper energy means lower power generation costs; lower power costs mean more room for growth. Companies can produce stuff cheaper, pass it on to people who are going to buy more stuff because now it's cheaper, etc., etc., etc. The S&P was able to run up in 1988. Today, oil is giving us pretty similar vibes. West Texas Intermediate slid from its $80 high toward below $70—time of recording was upper 60s. Same scenario, different decades. So why is this oil drop a big deal? Simple: cheaper crude keeps inflation in check. Good—oil prices are down; gas prices are down. Trump's always yelling about "Drill, baby, drill." Well, low oil prices mean cheaper gas, warmer homes, humming power plants—all this stuff without breaking the bank. Cheaper food because it's cheaper to drive the trucks to deliver it to you. Even in 2023, petroleum's still king—36% of US energy, give or take, still petroleum. Back in '87, that $17 oil did not just sit there; it fueled a leaner economy. The S&P felt it, climbing 12% in '88. Today, with West Texas Intermediate oil sliding pretty far down in price, it's the same playbook: lower costs, bigger runway. I believe Bitcoin is going along for the ride here as well.
A lot of crypto investors also follow this last important sign. No, we're not going to talk about the M2 today. We talk about the M2 all day, every day. Still bullish on M2. The DXY, or the dollar index, measures the value of the US dollar against a basket of foreign currencies—namely, the euro, the Japanese yen, the British pound, Canadian dollar, Swedish krona, and Swiss franc. We've all known that the DXY is inversely correlated to the price of Bitcoin, which means that when the dollar index goes up, the price of cryptocurrencies tends to go down, and vice versa. Confidence in the US dollar will make investors divert liquidity from risk assets to safe havens like cash or bonds. In 1987, the DXY was down big time. Early that year, it was still floating at 100, still bruised from the 1985 Plaza Accord when the United States, they came in, they begged Japan and France and Germany and the UK to tank the dollar's value and to reduce the US trade deficit. By Black Monday, it was sliding down to 90-ish. By year-end, which is a pretty damn big move. A weaker greenback and a shaky market—recipe for panic, devastation, fear. Well, things went the other way, actually. That drop was actually a booster shot for the US economy, US markets. The cheaper dollar meant US exports actually got a big boost—more demand, more growth. The S&P rallied in late 1987 and jumped 12% again in '88. Today, the DXY is wobbling again, down from around 110 highs to near 100 recently, with pretty brutal-looking charts. That signal is probably going to go lower. Same old song: soft dollar, strong setup. That's what Trump wants—Trump wants a softer dollar for risk assets and for better economics and better trade and all that kind of stuff. And although Bitcoin didn't even produce its first block back in 1987—took almost 30 more years—getting old, man—the number one crypto is still a risk asset, similar to stocks. S&P 5—largely checks with the S&P 500 and the Nasdaq 100. So if history repeats, then this is another signal to stack up some more Bitcoin.
Sliding bond yields, oil prices, and a sliding dollar in harmony back in 1987 propelled risk assets higher. Well, Bitcoin hadn't been created yet, it's essential to recognize the S&P 500 and Bitcoin today share a very notable and very strong correlation—perhaps not perfect, but essentially close enough. It's clear that when these three factors decline, risk assets tend to rise. It's not me—I'm not saying we're going to go back to the Giga moon tomorrow. Bonds, widely regarded as one of the safest investments, lose their appeal with lower yields, prompting savvy investors to seek higher returns from riskier assets. So they come back into tech stocks; they come back into Bitcoin; eventually, money gets thrown into dog coins, and we repeat all this craziness again. Lower oil prices translate to reduced power costs, which lower the price of goods across the board, free up capital for business expansion. This domino effect leads to lower inflation; lower inflation often paves the way for reduced interest rates; reduced interest rates mean even more economic activity, cheaper borrowing—all that kind of stuff. When combined with sliding bond yields, this creates a powerful mix of conditions that could fuel the next leg of the bull market cycle. It doesn't happen overnight, though, guys. Okay, don't expect this tomorrow. We're looking months later this year as bond yields decline further; the DXY will likely follow suit. A weakening dollar can be as compelling as an inverse Cramer signal when it comes to the cryptocurrency market. Admittedly, the current market does feel a bit, you know, overly panicky, with recessionary vibes, and arguably the US has been in a recession for a few years; it's just that it was kind of, kind of hidden by massive government spending. But it's crucial to look beyond the numbers on the charts and focus on the underlying dynamics at play here, drawing lessons from historical parallels. Obviously, useful—the past returns do not equate to future returns, right? Nothing is perfect; history doesn't repeat, but it does rhyme. This perspective has led me to keep my faith in my cryptocurrency holdings, particularly my Bitcoin. Sure, there's always the risk of being a bag holder for another few years—been there before; we'll do it again, I guess—but it's always risk, and I'm willing to take it. Okay, at the end of the day, I'm still on the club for the a million dollar Bitcoin in the 2030s, so I'll be holding the altcoins. H yeah, there's some risks taken there for sure. But if all this stuff lines up and we can get a good rally second half of the year or sometime in Q2 starting then, the altcoins are going to go absolutely bananas. But just because this is what's happened in the past doesn't mean it's a guarantee what's going to happen now. There are a lot of moving pieces at play here, and if macro declines, if macro gets worse, if we confirm some of the worst things here for the US stock market and the US economy, then that undoes all that, and we don't get this. But this, combined with a variety of other factors, puts the odds more on a big market boom sometime later this year. That could be May; that could be September, October; it could be until December, but it'll come. Thanks for watching.