Transcription
Hey, what's going on everybody? Welcome to Crypto Capital Venture. Hope you're having an awesome day.
Today I'm out walking. Wanted to talk through some of the stuff that's going on with with you guys today. A couple massive headlines that are so meaningful. Putting aside price action to crypto on the macro. I got to say, I've been enjoying a lot doing technical analysis more on the zoomed in on the channel lately because in my opinion, we're kind of working through a structural bottom of the bare market. I think we're getting very close to actually ending it.
But today, I want to step back outside of the charts. I want to step step back a little and kind of bring two pieces of news that kind of happened today that are, in my opinion, massive for crypto. Reason being, too, is because these two things that we're about to discuss are just majorly confluent with the price action of crypto and everything going on with the structural bottom that I think is happening right now. I know everybody doesn't like talking about these things, but they're probably two of the most important things happening right now. Two of the most important developments for crypto to pay attention to right now. Um, especially if you're kind of over just looking at price action.
So, first one is Clarity Act. We just got it. I know I know to a lot of people it's just like the same old thing, but we just got really major news today in terms of the Clarity Act. A big update from Senator Tillis. And then the second one is Kevin Walsh. Everybody's talking about FOMC and we're gonna talk about it. We're gonna talk about what happened today. Fed chair Jerome Pal. This was his last FOMC meeting. But Walsh, he was just voted through the Senate Banking Committee and that's massive because it clears a path for him to become the next Fed chair. And I want to talk about both of these things in context to the structural bottom, in context to where crypto is right now because crypto is one of the only assets if you're really just looking at things in the world that has not really made a move to the upside yet, right? It hasn't done it. And that's been part of the frustration of crypto holders. It's undervalued. It's just kind of sitting there on its hands while everything else has had a run. And so these two developments happening on the same day which is today is a very big development and I want to discuss it on the macro.
So I'm sure you saw Jerome Pal just had his last FOMC press conference today. End of an era basically and the FOMC as you know left rates unchanged. That was completely expected. So the federal funds rate target uh stays at like 3 and a half to 3.75% for third meeting in a row. So, it's basically the same restrictive posture that we've seen for months now from Pal. He's been holding for like a year now. But the contrast that matters, and this is really why I want to do this video. While Pal is wrapping up his term, and unfortunately, he announced today as well he's going to stay on the board as Fed governor. But while this is all happening, holding rates steady, doing all that, the Senate Banking Committee voted Kevin Walsh through this morning 13 to1 or I'm sorry, 13 to1. So that puts him completely on track for a full Senate floor vote in the next couple of weeks. So he'll be in the chair by the next FOMC meeting in June. And so you've got, you know, the same day, old chair, Jerome Pal holding rate steady, new chair on his way in and Kevin Walsh is walking in with a totally different lens. This is what I want to talk about in this video, especially if you're a crypto holder. Most people are going to miss this part. And it's just because most people don't want to pay attention to this part. And I know that because realistically, I don't really like paying attention to it either. I just like charts. I like price action. But I've become so hyperfocused on this stuff. Kevin Walsh, he's not coming in to manage like the same playbook as Jerome Pal. like Jerome Pound, Kevin Marsh are on completely separate pages when it comes to these types of things. He's coming in to kind of rewrite everything. And there's two pieces of his regime change that I want to talk about with you guys. And I really want to understand this with you together because when you put these two things side by side, they're powerful. And it's powerful for crypto holders. And we're going to explain why and see why fundamentally.
So, first off, WSH, Kevin Walsh, he he genuinely believes that AI, and I showed a clip in a recent video, AI is a structural deflationary force, that we're at the front end of a real productivity boom that's going to make things cheaper across the economy over the next several years. That economic growth in that kind of environment is not inflationary at all. It's actually the opposite. like we're in the early innings of a structural decline in prices and I want to underline that because if you just look at most headlines or talk to most people the thought is exact opposite. So that's number one. Second and this piece just kind of dropped publicly during the confirmation hearing. Worsh wants to fundamentally change how the Fed measures inflation in the first place. So right now the Fed, they lean on a measure called core PCE. And you probably see this all the time if you're on X especially people dropping headlines about core PCE updates which basically strip out food, strip out energy. So Worsh basically thinks that it's just like too rough. You know that data is too much, too noisy, whatever you want to call it. So he wants to move forward with what's called a trimmed mean, which is a measure that filters out all the extreme price moves on both ends. So it strips out the outliers, eliminates noise from oneoff shocks that people tend to hyperfocus on, especially headlines, disruptions, geopolitics. We see that like right now, all that stuff, he wants to strip it out. And under that kind of measurement, the underlying trend of inflation right now actually looks meaningfully better than what the headlines are suggesting. This is a huge reason why I've remained kind of macro bullish on the economy, on data, when a lot of the shorter term data is not looking very good at all.
So when you put these two pieces together, right, he thinks AI is structurally pulling prices down, which I mean, if you just focus on the data, that's what it's looking like right now. and he wants to measure inflation in a way that lets that underlining or underlying disinflation actually show up clearly in the data because it's getting hidden. And so, I mean, if you really believe that, if you really believe it, you can cut rates pretty aggressively without worrying about reigniting inflation. And Kevin Walsh, if you just listen to him, he really does believe it. I'm not saying like day one he's just massively going to be trying to cut cut rates like crazy, but please keep this in mind. These reasons are why War can simultaneously talk about shrinking the Fed's balance sheet, and this is what's tripping everybody up right now. I'm telling you, shrinking the Fed's balance sheet. That's what he wants to do. It sounds terrible to people, and lowering short-term rates at the same time. Most cycles, those two things go together, like cuts come with quantitative easing, right? What he's signaling is just different. It's a complete regime change, and it's it gets people bearish to think about it. But I can't stress this enough. This sets the table for exactly what crypto needs.
And I know what probably a lot of you are thinking right now, and there's probably a lot of people that haven't even made it to this part of the video, and they're going to comment about this. Quantitative easing. What about quantitative easing? The 1990s kind of killed the quantitative easing myth before it even became a thing. Let me explain that. So, everybody thinks cryptobull market needs quantitative easing. Bitcoin pumps when the balance sheet expands or without stimulus, what's going to be the cat catalyst? You know what I mean? Without the money printers, without that 2020 style Fed balance sheet, how are we going to pump into a bull market? And I completely used to think that way as well. I mean, it's really the only Fed playbook that most of us have really lived through, especially if you're a crypto holder. post 2008 just kind of conditioned all of us to assume liquidity has to come with a printing press like a printer right that's why we're always like QE print bull market but it's completely an assumption it's not like a mechanism that is the only mechanism think about this for just a second do you think that quantitative easing triggered the roaring 1990s productivity boom I've been talking about that a lot cuz I think that's what's setting up right now in the US. Do you think QA triggered that productivity boom the the roaring 90s? It was one of the longest biggest stretches of non-inflationary growth in modern American history. Quantitative easing wasn't even a thing back then. The Fed didn't pull like that lever at all. Right? And we still got, you know, a decade of expansion, soaring asset prices. It was just like bull market high, little consolidation, bull market high, little consolidation over and over and really a tech revolution that completely completely reshaped the global economy. So what drove that? That's the question. And the answer is very simple. Productivity, innovation, capital efficiency, real real economic gains that let money flow into risk assets without inflation getting out of hand. Imagine that. a clean mechanism like that that doesn't require printers or QE cuz QE again didn't exist back then. Those are kind of the same exact forces Worsh is pointing at right now with AI and really with his thought on monetary policy.
All right, so that's the Fed, that's Kevin Worsh, that's inflation. So just stay with me because this is the second piece of the day of what's going on right now. And the timing, I mean, is pretty crazy. It's all mixed in the headlines. It's all mixed in absolutely suppressed crypto prices, actually falling crypto prices. But that's why I'm doing the video cuz I know people just look at that and they get discouraged. I get it. But I'm focused on this this stuff.
So, the Clarity Act has been stuck for months. As you know, the single biggest procedural obstacle recently has been Senator Tillis. He's been negotiating with banking lobby over the whole stable coin yield language and all that stuff. and he's just had like this leverage, one guy having all this leverage to delay the markup over and over again in recent weeks. And what's crazy is Tillis was also the senator threatening to block Kevin Walsh. So anyway, this morning, right after the Worsh vote, cuz that was happening too, Tillis told reporters that he's ready to push the Clarity Act forward to a markup. So, he's going to ask the chair to schedule the whole markup or schedule the moment the Senate gets back from the recess because that's what there's going to be is going to be a recess. And he said that the bank concerns on stable coin yield have largely been heard and addressed and he's planning to release legislative text within days so that stakeholders can preview it before um the markup actually hits. So, this is kind of enormous news and again lost in the headlines and the noise of price action because it lines up almost exactly with what uh Novagrats laid out in a podcast that I covered and I think he did this like a few days ago which is basically markup early May Senate floor late May Trump's desk by June. I saw another post on X I forget who it was but they were saying you know maybe Trump's desk by August. Um, either way, this could be the direction that we're heading right now, especially with Tillis finally on board. Senator Lumis confirmed the May commitment on stage at the Bitcoin conference, I think yesterday. Like, she just did that. So, the pieces are kind of falling into place. They're kind of snapping into place in a very real way. And it's wild to think about how fast it could all start moving. It's so bearish. Tillis is like not on board with anything. And then all of a sudden, he is. And then we had Eleanor over on X who's been doing awesome coverage like of all of the crypto stuff via Congress and everything just really good coverage put out another update like a few hours ago maybe and the mood in the Senate banking staff and industry sources say that basically things are shifting very quickly. There's a lot of optimism that a markup is within striking distance. I really think that's the the language used. The yield fight is essentially over, which sounds crazy, but Brian Armstrong signaled that when he posted like a week or two ago um reposting Bessant to get the deal done, right? So now attention has kind of narrowed to these two last items, which is developer protections and then a piece around section 1960 of the criminal code as it relates to software developers. Now, on the developer side, Senator Lumis commented on it and basically said she's making progress around the the laws that are, you know, surrounding money transmitting laws. And then when it comes to ethics language, they're saying that, you know, that kind of can be worked out after the bill hits the Senate floor. So, today I'm like just kind of literally watching this entire story develop. And right now, I'm walking and I'm recording the video. And probably as I'm recording the video, there's probably more stuff coming out about FOMC, Jerome Pal, Clarity Act updates. Like it's so it's so quick moving. I'm just trying to bring into picture like the macro overview, the macro lens of why it's such a big deal for crypto. And let's talk about that.
My mic just died, but just sit with me for a second. The two biggest overhangs in crypto for this entire cycle have been the monetary regime. It's been non-stop about Jerome Pal and what else? The regulatory regime. So money has been tight for years. We just went through record-breaking quantitative tightening. The rules have been unclear and institutions kind of just sat there on their hands for a while because they couldn't get the green light on clarity, right? And now both of those overhangs are addressing themselves in real time. And these big headlines that are dropping today have everything to do with these things today. I mean, Kevin Worsh moves the monetary side towards a regime that supports growth without needing quantitative easing. This is probably the most bullish thing for crypto and most people are thinking it's not bullish, which is kind of funny. And then clarity gives institutions a legal framework to basically finally move into the space. and they've already been positioning, but they can move into the space at scale like exchanges, banks, asset managers, tokenized securities, all of it. So, you've got major macro tailwind plus regulatory status unlocking all happening at the same time. And where's crypto right now? What's crypto doing right now? What's sentiment right now? How do you and I feel in terms of crypto? It's not looking great. It's the asset class that hasn't really priced any of this in at all yet. Equities all-time highs. Gold all-time highs. Real estate pricing dollars, I mean, completely. You know the story there. Crypto is just like an asset class that has not done anything. And I don't think I don't think it's a mistake. I think it's the absolute exact opportunity.
So, as always, I'm obviously macro bullish. I'm not telling anybody what to do here. Like, do your your own research. Do your own homework. But the framework for the entire macro crypto bull market I keep coming back to is pretty simple. The timeline has not been simple and I've messed up the timeline myself. We're in a world, you are in a world where the Fed is shifting towards this productivity disinflation lens where the government is staring down this massive interest expense on the debt and is just incentivized to support lower short-term rates. Like that's just the name of the game right now. You cannot ignore that. And where the regulatory door for digital assets is finally about to swing open, we have the confluence of all of these things. So in that kind of world, I think you want exposure to assets that don't depend on government discipline, right? That's hard assets, that's crypto, obviously, Bitcoin, and then exposure across altcoins as well. If depending on what your risk appetite is, if you want to expand your risk your risk curve, then obviously that would be altcoins. It's all based on kind of your own approach to these markets.
With all that being said, here's what I do know. Volatility is very real. It's non-stop. It's all over the place. Time horizons matter. I've been wrong in terms of time frame of all these things. My macro bull thesis is playing out. The timing has not really been right, but it's been a prolonged cycle. Whether it's from a tightening perspective, whether it's from economic contraction perspective, but really at the end of the day, the people that get shaken out at structural bottoms are almost always the ones that really are never really looking at why are they holding in the first place as well as what is going on fundamentally in the crypto space because it's not just about price action. It's not just about technical analysis. It's the fundamentals from a macro perspective.
So the reason I thought today would be a good idea just to kind of walk and talk about these things is I think a lot of people are going to miss kind of what's going on right now because PAL's press conference today the FOMC meeting it's going to dominate the headlines the clarity news that's dropping today it's going to get filed under you know regulatory boring or just same old same old everybody's sick of hearing it and I get it wash becoming the Fed chair that's just going to probably be treated like all right whatever a new Fed chair but the way that I'm looking at it these are not like separate stories. They're the same story. The setup that is going to take crypto from this like kind of sleeping moment out of a structural bottom of a crazy bare market with terrible sentiment to the next leg up. That is what's being built right now in real time. And it starts with these headlines. It starts with the fundamentals of what's going on right now. And that's kind of the framework that I'm trying to deal with right now. Putting aside the technical analysis and pricing and I've been trying to do this for a while. Um, so I would say try not to react to headlines. I'm trying to piece all the macro pieces together and so I wanted to share it with you. If this was helpful or entertaining in any way, please consider giving it a subscribe. Hit that like button. Your support means a ton to me as I grow this channel. I appreciate each and every one of you. I'll see you in the next video. God bless.