1 00:00:00,300 --> 00:00:02,166 welcome to money is freedom 2 00:00:02,166 --> 00:00:03,066 a podcast 3 00:00:03,066 --> 00:00:06,266 exploring how finance and freedom connect in our lives 4 00:00:07,233 --> 00:00:09,066 created from thoughtful research 5 00:00:09,066 --> 00:00:11,400 and narrated by Notebook LM AI 6 00:00:11,500 --> 00:00:13,433 this series brings you clear 7 00:00:13,433 --> 00:00:16,166 meaningful insights into finance and beyond 8 00:00:16,366 --> 00:00:18,066 welcome to episode 26 9 00:00:18,066 --> 00:00:20,233 where we examine the recent market correction 10 00:00:20,233 --> 00:00:21,866 in crypto's resilience 11 00:00:21,866 --> 00:00:23,766 compared to traditional equities 12 00:00:24,000 --> 00:00:26,500 despite factors like strong employment data 13 00:00:26,500 --> 00:00:28,000 and inflation concerns 14 00:00:28,366 --> 00:00:30,933 Bitcoin and Ethereum have shown strength 15 00:00:31,266 --> 00:00:32,700 the episode also discusses 16 00:00:32,700 --> 00:00:34,766 how 2025 seems to be breaking 17 00:00:34,766 --> 00:00:37,800 Bitcoin's historical pattern of January corrections 18 00:00:38,100 --> 00:00:41,666 the crypto market reacted positively to recent CPI data 19 00:00:41,766 --> 00:00:43,266 while the traditional stock market 20 00:00:43,266 --> 00:00:45,100 showed only modest recovery 21 00:00:45,366 --> 00:00:46,500 the podcast highlights 22 00:00:46,500 --> 00:00:48,666 the evolving relationship between traditional 23 00:00:48,666 --> 00:00:52,133 and crypto markets and crypto's increasing resilience 24 00:00:52,233 --> 00:00:53,966 all right buckle up everybody 25 00:00:53,966 --> 00:00:54,766 because today 26 00:00:54,766 --> 00:00:57,500 we're diving headfirst into market corrections 27 00:00:57,500 --> 00:00:59,200 yeah it's a hot topic right now 28 00:00:59,200 --> 00:01:00,000 you know 29 00:01:00,600 --> 00:01:01,633 both the stock market 30 00:01:01,633 --> 00:01:03,166 and crypto have been taking a beating 31 00:01:03,166 --> 00:01:05,566 definitely a bit of a roller coaster ride lately 32 00:01:05,566 --> 00:01:07,366 but here's a thing that's got me curious 33 00:01:07,800 --> 00:01:10,600 crypto seems to be bouncing back way faster 34 00:01:10,600 --> 00:01:11,866 it's interesting right 35 00:01:11,866 --> 00:01:13,866 so we're gonna try and figure out why 36 00:01:13,866 --> 00:01:16,166 using this article for medium sounds good to me 37 00:01:16,400 --> 00:01:18,600 why crypto is showing resilience 38 00:01:18,600 --> 00:01:20,500 amid broader market turbulence 39 00:01:20,500 --> 00:01:21,200 okay yeah 40 00:01:21,200 --> 00:01:23,300 I saw that article catchy title 41 00:01:23,300 --> 00:01:25,366 and just to tease you all a little bit 42 00:01:25,466 --> 00:01:28,366 bitcoin might actually be breaking its own rules 43 00:01:28,366 --> 00:01:29,400 at this time around 44 00:01:30,700 --> 00:01:31,600 that's interesting 45 00:01:31,600 --> 00:01:33,833 people always say Bitcoin follows these patterns 46 00:01:33,833 --> 00:01:36,766 well we're about to find out so first things first 47 00:01:36,766 --> 00:01:38,700 let's break down why we're seeing this correction 48 00:01:38,700 --> 00:01:40,366 in the first place what happened 49 00:01:40,366 --> 00:01:41,666 what spooked everyone 50 00:01:42,766 --> 00:01:44,233 well um 51 00:01:44,233 --> 00:01:47,033 a lot of it boils down to jobs jobs okay 52 00:01:47,033 --> 00:01:50,433 that December 2024 jobs report remember 53 00:01:50,433 --> 00:01:51,166 oh yeah that's right 54 00:01:51,166 --> 00:01:53,033 it was way stronger than anyone expected 55 00:01:53,033 --> 00:01:55,133 a lot more jobs added than we thought yeah 56 00:01:55,200 --> 00:01:59,233 way more 256,000 new jobs wow 57 00:01:59,233 --> 00:02:01,866 when the prediction was only 160,000 58 00:02:01,866 --> 00:02:03,033 so that's good news right 59 00:02:03,033 --> 00:02:05,400 well it's good for the economy on the surface 60 00:02:05,500 --> 00:02:08,966 but but wait explain that to me more jobs 61 00:02:08,966 --> 00:02:10,700 how is that a bad thing okay 62 00:02:10,700 --> 00:02:12,666 think of it like this imagine 63 00:02:12,666 --> 00:02:13,800 there's only a certain 64 00:02:13,800 --> 00:02:16,066 number of swings on a playground okay 65 00:02:16,066 --> 00:02:16,500 got it 66 00:02:16,500 --> 00:02:19,566 but then all of a sudden like tons of new kids show up 67 00:02:19,566 --> 00:02:21,100 yeah and they all wanna use the swings 68 00:02:21,100 --> 00:02:22,200 exactly 69 00:02:22,433 --> 00:02:25,700 more kids wanting to swing that means more demand right 70 00:02:25,700 --> 00:02:27,966 so more people working means more money to spend 71 00:02:27,966 --> 00:02:28,433 exactly 72 00:02:28,433 --> 00:02:31,433 more people with money to spend means higher prices 73 00:02:31,433 --> 00:02:35,200 so basically more jobs equals inflation ah 74 00:02:35,200 --> 00:02:36,433 I see so 75 00:02:36,433 --> 00:02:37,066 this strong 76 00:02:37,066 --> 00:02:39,833 jobs report is making everyone worried about inflation 77 00:02:39,833 --> 00:02:41,800 right and that low unemployment rate too 78 00:02:41,800 --> 00:02:45,600 only 4.1% it all just kind of adds fuel to the fire 79 00:02:45,833 --> 00:02:46,633 investors are worried 80 00:02:46,633 --> 00:02:48,100 the Fed might have to raise interest 81 00:02:48,100 --> 00:02:50,066 rates to cool things down okay 82 00:02:50,066 --> 00:02:52,600 so interest rates remind me how this all works again 83 00:02:52,633 --> 00:02:54,400 basically when interest rates go up 84 00:02:54,400 --> 00:02:56,566 it gets more expensive to borrow money right 85 00:02:56,566 --> 00:02:58,400 right like credit cards and loans 86 00:02:58,500 --> 00:03:01,766 it affects companies too costs them more to do business 87 00:03:01,800 --> 00:03:04,166 slows downgrowth cuts into profit 88 00:03:04,166 --> 00:03:06,233 so investors see interest rates going up 89 00:03:06,233 --> 00:03:08,400 and they start to panic pretty much 90 00:03:08,400 --> 00:03:09,966 they start selling off stocks 91 00:03:10,066 --> 00:03:10,566 especially 92 00:03:10,566 --> 00:03:13,100 in sectors that are sensitive to intrastrate hikes 93 00:03:13,100 --> 00:03:14,300 you know like tech 94 00:03:14,300 --> 00:03:14,966 yeah because 95 00:03:14,966 --> 00:03:15,900 the stock market is 96 00:03:15,900 --> 00:03:18,066 all about what people think is gonna happen 97 00:03:18,066 --> 00:03:19,566 in the future right exactly 98 00:03:19,566 --> 00:03:22,433 if investors think future growth is going to be slow 99 00:03:22,433 --> 00:03:24,200 because of high borrowing costs 100 00:03:24,500 --> 00:03:27,100 they're not gonna wanna pay as much for stocks today 101 00:03:27,100 --> 00:03:29,200 make sense and we saw that play out 102 00:03:29,200 --> 00:03:32,300 big time with those magnificent seven tech stocks 103 00:03:32,300 --> 00:03:34,433 didn't we Apple Microsoft 104 00:03:34,433 --> 00:03:35,966 Google the whole gang 105 00:03:35,966 --> 00:03:37,200 they all took a hit yeah 106 00:03:37,200 --> 00:03:37,833 they did 107 00:03:37,833 --> 00:03:41,966 the article says they're down an average of 14.1% ouch 108 00:03:41,966 --> 00:03:44,266 yeah and it's not just those big companies 109 00:03:44,833 --> 00:03:45,500 what do you mean well 110 00:03:45,500 --> 00:03:46,800 the Russell 2000 you know 111 00:03:46,800 --> 00:03:48,400 the one that tracks smaller companies 112 00:03:48,400 --> 00:03:49,633 that's down to oh wow 113 00:03:49,633 --> 00:03:51,466 so this is like a widespread correction 114 00:03:51,466 --> 00:03:53,400 not just limited to TAC it is 115 00:03:53,400 --> 00:03:55,400 it's back down to where it was before the election 116 00:03:55,400 --> 00:03:56,800 pretty much across the board right 117 00:03:56,800 --> 00:03:59,266 so we've got the inflation worries 118 00:03:59,266 --> 00:04:00,400 rising interest rates 119 00:04:00,400 --> 00:04:02,066 investors hitting the panic buttons 120 00:04:02,066 --> 00:04:05,200 selling off stocks but crypto took a hit too 121 00:04:05,200 --> 00:04:06,200 didn't it yeah 122 00:04:06,200 --> 00:04:08,833 I thought crypto was supposed to be this decentralized 123 00:04:08,833 --> 00:04:11,133 separate system what happened there 124 00:04:11,166 --> 00:04:13,566 well in theory yes 125 00:04:13,566 --> 00:04:14,700 but at the end of the day 126 00:04:14,700 --> 00:04:16,900 crypto is still a market so 127 00:04:17,066 --> 00:04:19,066 and markets are driven by people 128 00:04:19,066 --> 00:04:20,300 by how they feel 129 00:04:21,100 --> 00:04:23,433 when there's a big shift in how much risk 130 00:04:23,433 --> 00:04:26,300 people wanna take like we've seen with this correction 131 00:04:26,300 --> 00:04:28,766 even something like crypto can feel it 132 00:04:28,766 --> 00:04:30,200 even though it's supposed to be separate 133 00:04:30,200 --> 00:04:31,000 exactly 134 00:04:31,000 --> 00:04:34,100 so even though crypto has its own unique dynamics 135 00:04:34,233 --> 00:04:35,066 it's still kind of 136 00:04:35,066 --> 00:04:37,233 swimming in the same ocean as the stock market 137 00:04:37,233 --> 00:04:37,500 okay 138 00:04:37,500 --> 00:04:39,566 so everyone's getting cost around by the same waves 139 00:04:39,566 --> 00:04:41,566 pretty much but here's what I don't get 140 00:04:41,566 --> 00:04:43,900 stocks in crypto both went down 141 00:04:43,900 --> 00:04:47,066 but crypto seems to be bouncing back much faster 142 00:04:47,066 --> 00:04:50,100 it is our article calls it Crypto's resilience 143 00:04:51,066 --> 00:04:54,266 why is that what's making crypto so much more resilient 144 00:04:54,266 --> 00:04:56,266 compared to the regular stock market 145 00:04:56,266 --> 00:04:58,500 well there are a couple of things that play um 146 00:04:58,500 --> 00:05:01,500 one of the biggest things is institutional adoption 147 00:05:01,500 --> 00:05:02,600 institutional adoption 148 00:05:02,600 --> 00:05:04,600 so like the big players are getting involved 149 00:05:04,600 --> 00:05:06,466 exactly hedge funds 150 00:05:06,466 --> 00:05:08,233 pension funds you name it 151 00:05:08,233 --> 00:05:10,000 they're starting to get into crypto 152 00:05:10,266 --> 00:05:11,833 and that brings a lot of money 153 00:05:11,833 --> 00:05:13,266 a lot of capital right 154 00:05:13,266 --> 00:05:14,766 it probably makes it seem more legit 155 00:05:14,766 --> 00:05:16,600 like it's not just for tech nerds anymore 156 00:05:16,600 --> 00:05:18,566 exactly it's becoming mainstream 157 00:05:18,566 --> 00:05:20,500 and one of the biggest drivers of that 158 00:05:20,500 --> 00:05:23,866 has been the approval of spot bitcoin etfs 159 00:05:23,866 --> 00:05:24,433 oh yeah 160 00:05:24,433 --> 00:05:26,466 those etfs but um 161 00:05:26,633 --> 00:05:28,300 remind me how those work again 162 00:05:28,300 --> 00:05:29,500 well basically 163 00:05:29,500 --> 00:05:31,400 etfs make it really easy 164 00:05:31,400 --> 00:05:34,300 for everyday investors to get exposure to Bitcoin 165 00:05:34,300 --> 00:05:35,700 through their brokerage accounts 166 00:05:35,700 --> 00:05:36,566 okay so they 167 00:05:36,566 --> 00:05:38,600 don't have to go through the hassle of setting up a 168 00:05:38,700 --> 00:05:41,766 crypto wallet or figuring out all the technical stuff 169 00:05:41,766 --> 00:05:42,500 exactly 170 00:05:42,500 --> 00:05:45,666 it's like a pre made salad mix from the grocery store 171 00:05:45,666 --> 00:05:47,200 you don't have to chop all the veggies yourself 172 00:05:47,200 --> 00:05:49,033 that's good analogy so 173 00:05:49,033 --> 00:05:50,633 these etfs have been 174 00:05:50,633 --> 00:05:53,200 a big deal for mainstream adoption of crypto 175 00:05:53,200 --> 00:05:55,633 okay so institutional adoption and these etfs 176 00:05:55,633 --> 00:05:57,000 they're making a difference 177 00:05:57,500 --> 00:05:59,566 what else is helping crypto stay strong 178 00:05:59,566 --> 00:06:01,766 the crypto market itself is just maturing 179 00:06:01,766 --> 00:06:03,700 it's becoming more liquid 180 00:06:03,766 --> 00:06:04,900 easier to buy and sell 181 00:06:04,900 --> 00:06:07,900 large amounts without huge price swings 182 00:06:08,266 --> 00:06:10,833 we're also seeing more sophisticated platforms 183 00:06:10,833 --> 00:06:12,666 and financial instruments emerge 184 00:06:12,666 --> 00:06:14,900 the whole ecosystem is getting stronger 185 00:06:14,900 --> 00:06:16,500 so it's not the Wild West anymore 186 00:06:16,500 --> 00:06:18,433 like there's a sheriff in town now 187 00:06:18,433 --> 00:06:19,100 exactly 188 00:06:19,100 --> 00:06:22,100 it's becoming a more mature and efficient market 189 00:06:22,100 --> 00:06:22,566 which means 190 00:06:22,566 --> 00:06:26,233 it's not as susceptible to those crazy price swings 191 00:06:26,233 --> 00:06:27,800 we used to see and on top of that 192 00:06:27,800 --> 00:06:29,966 crypto operates separately from the regular 193 00:06:29,966 --> 00:06:31,166 financial system right yeah 194 00:06:31,166 --> 00:06:34,300 so it's not as affected by those interest rate hikes 195 00:06:34,300 --> 00:06:36,800 they're causing so much stress in the stock market 196 00:06:36,800 --> 00:06:39,600 right it's got a degree of insulation from those macro 197 00:06:39,600 --> 00:06:41,000 economic forces so 198 00:06:41,000 --> 00:06:43,033 even though crypto got caught in the same way 199 00:06:43,033 --> 00:06:45,700 this stocks it's got a different kind of surfboard 200 00:06:45,700 --> 00:06:46,600 I like that yeah 201 00:06:46,600 --> 00:06:48,166 it's writing the wave differently 202 00:06:48,166 --> 00:06:49,100 okay that makes sense 203 00:06:49,100 --> 00:06:49,600 yeah but 204 00:06:49,600 --> 00:06:50,200 there's one more thing 205 00:06:50,200 --> 00:06:51,566 that's got me scratching my head 206 00:06:51,666 --> 00:06:52,466 you mentioned earlier 207 00:06:52,466 --> 00:06:54,000 that Bitcoin might be breaking its 208 00:06:54,000 --> 00:06:54,966 own rules yeah 209 00:06:54,966 --> 00:06:56,266 what's that all about well 210 00:06:56,266 --> 00:06:58,500 it has to do with this historical pattern 211 00:06:58,500 --> 00:07:02,766 bitcoin tends to follow especially after a having year 212 00:07:02,766 --> 00:07:03,500 having year okay 213 00:07:03,500 --> 00:07:04,666 I have no idea what that means 214 00:07:04,666 --> 00:07:07,200 fill me in so every four years 215 00:07:07,200 --> 00:07:08,200 Bitcoin's code 216 00:07:08,200 --> 00:07:11,833 actually cuts the rate of new Bitcoin creation in half 217 00:07:11,833 --> 00:07:12,800 oh wow 218 00:07:13,033 --> 00:07:14,700 so like less bitcoin is being made 219 00:07:14,700 --> 00:07:16,700 exactly and that can impact the price 220 00:07:16,700 --> 00:07:19,000 because you have less supply coming into the market 221 00:07:19,000 --> 00:07:20,100 right that makes sense 222 00:07:20,200 --> 00:07:20,633 so lith 223 00:07:20,633 --> 00:07:23,033 bitcoin being created usually means the price goes up 224 00:07:23,033 --> 00:07:24,200 it can yeah 225 00:07:24,200 --> 00:07:26,666 think of it like a limited edition sneaker drop 226 00:07:26,666 --> 00:07:28,966 or something the fewer pairs there are 227 00:07:28,966 --> 00:07:30,500 the more people are willing to pay 228 00:07:30,500 --> 00:07:33,633 I get it scarcity drives up the price right 229 00:07:33,633 --> 00:07:36,266 but here's the thing after a having year 230 00:07:36,466 --> 00:07:39,066 bitcoin is typically seen a dip in January 231 00:07:39,066 --> 00:07:40,000 really a dip 232 00:07:40,000 --> 00:07:42,466 I thought less supply meant higher prices 233 00:07:42,466 --> 00:07:43,800 it usually does 234 00:07:44,066 --> 00:07:47,266 but we saw this pattern in 2017 and 2021 235 00:07:47,266 --> 00:07:49,333 both times after having year 236 00:07:49,433 --> 00:07:52,000 bitcoin dropped around 30% in January 237 00:07:52,000 --> 00:07:53,500 wow so it's like clockwork 238 00:07:53,500 --> 00:07:54,666 every having year 239 00:07:54,666 --> 00:07:57,000 bitcoin goes on sale in January pretty much 240 00:07:57,000 --> 00:07:58,900 it's almost like it has its own little calendar 241 00:07:58,900 --> 00:07:59,966 so what about this year 242 00:07:59,966 --> 00:08:02,066 did bitcoin dip again in January 243 00:08:02,066 --> 00:08:03,800 well that's where things get interesting 244 00:08:03,866 --> 00:08:06,400 this year it seems like that big market correction 245 00:08:06,400 --> 00:08:07,266 we talked about 246 00:08:07,266 --> 00:08:09,833 it kinda acted like an early January correction 247 00:08:09,833 --> 00:08:11,000 for bitcoin early 248 00:08:11,000 --> 00:08:12,766 so it dipped before January 249 00:08:12,766 --> 00:08:13,466 yeah bitcoin 250 00:08:13,466 --> 00:08:17,533 dropped from about $108,000 on December 31st 251 00:08:17,633 --> 00:08:21,266 to around $92,000 by January 14th 252 00:08:21,566 --> 00:08:23,300 hmm that's a pretty big drop 253 00:08:23,400 --> 00:08:24,766 but not quite 30% right 254 00:08:24,766 --> 00:08:25,066 right 255 00:08:25,066 --> 00:08:28,666 so it's not following that typical pattern this time 256 00:08:28,666 --> 00:08:32,566 so what's going on is bitcoin breaking its own rules 257 00:08:32,700 --> 00:08:33,766 it seems that way 258 00:08:33,766 --> 00:08:36,566 and this suggests that those macroeconomic forces 259 00:08:36,566 --> 00:08:38,866 we talked about the interest rates 260 00:08:38,866 --> 00:08:41,700 the inflation worries they're actually having a bigger 261 00:08:41,700 --> 00:08:43,000 impact on bitcoin's price 262 00:08:43,000 --> 00:08:46,300 this time around than its own internal cycles 263 00:08:46,400 --> 00:08:47,200 so even though 264 00:08:47,200 --> 00:08:48,300 Bitcoin is supposed to be 265 00:08:48,300 --> 00:08:50,900 separate from the traditional financial system 266 00:08:51,000 --> 00:08:53,066 it's still getting affected by what's happening in 267 00:08:53,066 --> 00:08:54,900 the stock market it seems that way 268 00:08:54,900 --> 00:08:56,833 it's almost like the stock market's problems 269 00:08:56,833 --> 00:08:59,700 kind of front run Bitcoin's usual January dip 270 00:08:59,700 --> 00:09:01,600 so all that stuff happening in the stock market 271 00:09:01,600 --> 00:09:03,233 with investors worrying about interest rates 272 00:09:03,233 --> 00:09:06,100 and inflation it kind of spilled over into crypto 273 00:09:06,100 --> 00:09:06,900 yeah exactly 274 00:09:06,900 --> 00:09:07,500 like even though 275 00:09:07,500 --> 00:09:08,800 those kids on the playground 276 00:09:08,800 --> 00:09:09,866 are playing their own game 277 00:09:09,866 --> 00:09:12,300 with Bitcoin they're still in the same playground 278 00:09:12,300 --> 00:09:14,466 and they can still feel the overall mood 279 00:09:14,666 --> 00:09:15,566 that makes sense 280 00:09:15,566 --> 00:09:19,100 so it's not that Bitcoin is breaking its own rules 281 00:09:19,100 --> 00:09:21,200 it's just that there are bigger forces at play 282 00:09:21,200 --> 00:09:23,600 this time it seems that way 283 00:09:23,600 --> 00:09:26,866 it shows how bitcoin even though it's decentralized 284 00:09:26,866 --> 00:09:29,300 is becoming more integrated with the broader 285 00:09:29,300 --> 00:09:31,200 financial world that's really interesting 286 00:09:31,200 --> 00:09:34,166 okay so we've got this unusual bitcoin behavior 287 00:09:34,633 --> 00:09:36,033 and it's all tied to what's happening in 288 00:09:36,033 --> 00:09:38,033 the stock market but then we also have 289 00:09:38,033 --> 00:09:40,500 this new CPI data that just came out right 290 00:09:40,500 --> 00:09:42,100 yep on January 15th 291 00:09:42,100 --> 00:09:44,100 the CPI that's the Consumer Price Index 292 00:09:44,100 --> 00:09:45,433 which measures inflation right 293 00:09:45,433 --> 00:09:47,766 that's right and everyone's been watching it closely 294 00:09:47,766 --> 00:09:50,166 to see if inflation is finally starting to slow down 295 00:09:50,166 --> 00:09:52,066 so what did the CPI data say 296 00:09:52,200 --> 00:09:53,866 well the numbers were interesting 297 00:09:53,866 --> 00:09:55,100 the headlines CPI 298 00:09:55,400 --> 00:09:59,466 which measures overall inflation came in at 2.9% 299 00:09:59,466 --> 00:10:01,400 and that was pretty much what people were expecting 300 00:10:01,400 --> 00:10:02,500 right right yeah 301 00:10:02,500 --> 00:10:04,533 right in line with expectations 302 00:10:04,766 --> 00:10:08,066 but the course CCI which excludes more volatile things 303 00:10:08,066 --> 00:10:09,733 like food and energy prices 304 00:10:10,000 --> 00:10:11,900 was actually a bit better than expected 305 00:10:11,900 --> 00:10:12,833 oh so course 306 00:10:12,833 --> 00:10:15,833 CPI is like a more stable measure of inflation 307 00:10:15,833 --> 00:10:18,700 you could say that it came in at 3.2% 308 00:10:18,700 --> 00:10:19,800 which is better than expected 309 00:10:19,800 --> 00:10:20,466 you said yeah 310 00:10:20,466 --> 00:10:23,133 slightly better so is that good news for the markets 311 00:10:23,233 --> 00:10:25,500 well it depends on which market you're looking at 312 00:10:25,500 --> 00:10:28,000 what do you mean the cryptocurrency market reacted 313 00:10:28,000 --> 00:10:31,000 really positively to the CPI data really 314 00:10:31,000 --> 00:10:35,400 how so bitcoin surged back up towards $100,000 315 00:10:35,400 --> 00:10:37,900 wow that's a big jump 316 00:10:38,300 --> 00:10:41,766 but why did the crypto market react so positively 317 00:10:41,766 --> 00:10:44,266 it all has to do with what happened to tenure 318 00:10:44,266 --> 00:10:46,200 US Treasury yields okay 319 00:10:46,200 --> 00:10:48,200 back up for a second yields 320 00:10:48,200 --> 00:10:49,466 why are those so important again 321 00:10:49,466 --> 00:10:51,866 remember those swings on the playground we talked about 322 00:10:51,866 --> 00:10:54,000 yeah the ones with limited supply and high demand 323 00:10:54,000 --> 00:10:54,400 well 324 00:10:54,400 --> 00:10:57,433 think of bond yields as the cost of renting a swing set 325 00:10:57,433 --> 00:10:58,966 for a year when those yields 326 00:10:58,966 --> 00:11:01,900 are high it's like the rental price is expensive 327 00:11:01,900 --> 00:11:04,866 and investors are more likely to stick with their safe 328 00:11:04,866 --> 00:11:06,766 boring backyard swing set 329 00:11:06,766 --> 00:11:08,633 I see so bonds are like the safe option 330 00:11:08,633 --> 00:11:10,566 yeah generally speaking 331 00:11:10,766 --> 00:11:12,166 but when those yields dip 332 00:11:12,166 --> 00:11:14,600 it's like the rental price for that fancy 333 00:11:14,600 --> 00:11:17,966 new swing set suddenly becomes a lot more appealing 334 00:11:17,966 --> 00:11:21,033 so lower yields make riskier assets like crypto 335 00:11:21,033 --> 00:11:23,033 look more attractive exactly 336 00:11:23,033 --> 00:11:25,600 because the safe option isn't paying as much 337 00:11:25,900 --> 00:11:27,600 and this makes sense when you think about how 338 00:11:27,600 --> 00:11:29,600 bitcoin is becoming more widely seen 339 00:11:29,600 --> 00:11:32,066 as a potential hedge against inflation 340 00:11:32,200 --> 00:11:33,966 if people aren't as worried about inflation 341 00:11:33,966 --> 00:11:36,066 they might not be as interested in those hedges 342 00:11:36,066 --> 00:11:38,066 right because if inflation is cooling down 343 00:11:38,066 --> 00:11:39,833 you don't need as much Protection against it 344 00:11:39,833 --> 00:11:40,966 exactly so 345 00:11:40,966 --> 00:11:44,333 when that core CPI number came in better than expected 346 00:11:44,400 --> 00:11:47,366 it caused those tenure Treasury yields to dip a bit 347 00:11:47,400 --> 00:11:49,033 and that made riskier assets 348 00:11:49,033 --> 00:11:50,900 like crypto more attractive 349 00:11:50,900 --> 00:11:53,033 so crypto got a boost from the CPI news 350 00:11:53,033 --> 00:11:55,966 because it made the safe option less appealing 351 00:11:55,966 --> 00:11:56,866 exactly 352 00:11:57,100 --> 00:11:59,433 investors are always looking for the best return 353 00:11:59,433 --> 00:12:00,233 for their money 354 00:12:00,233 --> 00:12:02,366 and when safe investments aren't paying as much 355 00:12:02,366 --> 00:12:04,666 they're more likely to take on a little more risk 356 00:12:04,666 --> 00:12:07,800 that makes sense but what about the stock market 357 00:12:07,900 --> 00:12:11,100 didn't it also get some good news from the CPI data 358 00:12:11,166 --> 00:12:13,000 I mean inflation seems to be cooling down 359 00:12:13,000 --> 00:12:15,566 so shouldn't investors be happy about that 360 00:12:16,033 --> 00:12:17,300 logically yes 361 00:12:17,600 --> 00:12:19,433 but the stock markets reaction was 362 00:12:19,433 --> 00:12:22,500 much more muted than the crypto markets really 363 00:12:22,566 --> 00:12:24,433 why is that the Russell 2000 364 00:12:24,433 --> 00:12:26,400 for example only saw a small bump 365 00:12:27,000 --> 00:12:28,033 so the stock market didn't 366 00:12:28,033 --> 00:12:30,066 really care that much about the CPI news 367 00:12:30,066 --> 00:12:31,233 it did to some extent 368 00:12:31,233 --> 00:12:33,466 but those high bond yields are still a big factor 369 00:12:33,466 --> 00:12:36,066 they're still drawing investors away from stocks 370 00:12:36,066 --> 00:12:38,066 it's like the stock market is still sulking about 371 00:12:38,066 --> 00:12:39,400 those higher borrowing costs 372 00:12:39,400 --> 00:12:40,700 we talked about earlier like 373 00:12:40,700 --> 00:12:42,233 it can't quite shake off 374 00:12:42,233 --> 00:12:44,400 the worry that the economy might slow down 375 00:12:44,466 --> 00:12:46,133 yeah that's a good way to put it 376 00:12:46,300 --> 00:12:49,200 the CPI data was a step in the right direction 377 00:12:49,200 --> 00:12:51,366 but it hasn't completely erased those concerns 378 00:12:51,366 --> 00:12:53,466 about inflation or a potential slowdown 379 00:12:53,466 --> 00:12:55,666 okay so we've covered a lot of ground here 380 00:12:55,666 --> 00:12:57,366 we talked about the reasons behind 381 00:12:57,366 --> 00:12:58,933 the stock market correction 382 00:12:59,300 --> 00:13:01,266 how crypto is showing resilience 383 00:13:01,266 --> 00:13:04,433 and even how Bitcoin might be deviating from its usual 384 00:13:04,433 --> 00:13:06,000 post having year pattern 385 00:13:06,366 --> 00:13:09,666 and then we dove into how the latest CPI data 386 00:13:09,766 --> 00:13:11,800 impacted both markets in different ways 387 00:13:11,800 --> 00:13:13,166 we have yeah 388 00:13:13,366 --> 00:13:15,966 it's fascinating to see how everything is connected 389 00:13:15,966 --> 00:13:18,300 okay so after all that 390 00:13:18,633 --> 00:13:21,633 what does this mean for like the average investor 391 00:13:21,633 --> 00:13:24,000 someone like me or our listeners 392 00:13:24,033 --> 00:13:26,666 trying to make sense of all this market craziness 393 00:13:26,800 --> 00:13:30,100 what should we be doing I think the biggest takeaway is 394 00:13:30,100 --> 00:13:32,233 you gotta pay attention to everything everything 395 00:13:32,233 --> 00:13:33,766 both the traditional economic stuff 396 00:13:33,766 --> 00:13:35,600 like interest rates and jobs reports 397 00:13:35,600 --> 00:13:38,400 but also the stuff that's unique to crypto like what 398 00:13:38,400 --> 00:13:39,766 like institutional adoption 399 00:13:39,766 --> 00:13:42,500 who's getting involved are more big players coming in 400 00:13:42,500 --> 00:13:43,233 also you know 401 00:13:43,233 --> 00:13:45,166 what's happening with blockchain technology 402 00:13:45,433 --> 00:13:47,000 any new developments and of course 403 00:13:47,000 --> 00:13:48,200 what are governments doing 404 00:13:48,200 --> 00:13:49,866 are there new regulations coming 405 00:13:49,900 --> 00:13:51,966 all that can affect the crypto market 406 00:13:51,966 --> 00:13:53,766 so you're saying we have to be bilingual 407 00:13:54,100 --> 00:13:54,966 yeah kind of 408 00:13:54,966 --> 00:13:57,300 you gotta speak Wall Street in the metaverse 409 00:13:57,466 --> 00:13:59,000 no problem I'm a fast learner 410 00:13:59,633 --> 00:14:00,700 but speaking of learning 411 00:14:00,700 --> 00:14:02,666 this whole Bitcoin January anomaly thing 412 00:14:02,666 --> 00:14:04,466 that was a real eye opener for me 413 00:14:04,633 --> 00:14:05,800 you're saying that macro 414 00:14:05,800 --> 00:14:09,100 economic forces are actually driving Bitcoin's price 415 00:14:09,366 --> 00:14:12,100 more than its own internal cycles this time around 416 00:14:12,100 --> 00:14:13,200 so what does that mean 417 00:14:13,200 --> 00:14:14,266 for people who 418 00:14:14,466 --> 00:14:16,566 base their trading strategies on those cycles 419 00:14:16,566 --> 00:14:18,166 they're kinda out of luck right 420 00:14:18,166 --> 00:14:19,366 yeah it's a good question 421 00:14:19,366 --> 00:14:21,300 those strategies might need to adapt 422 00:14:21,433 --> 00:14:24,233 if we keep seeing these early bitcoin corrections 423 00:14:24,233 --> 00:14:26,366 those traders could be caught off guard 424 00:14:26,366 --> 00:14:28,033 it's like showing up to a party a day early 425 00:14:28,033 --> 00:14:29,500 because you got the date wrong 426 00:14:29,566 --> 00:14:30,766 haha exactly 427 00:14:30,766 --> 00:14:33,100 it just highlights how important it is to be flexible 428 00:14:33,100 --> 00:14:34,033 and stay informed 429 00:14:34,033 --> 00:14:36,966 especially with something as fast moving as crypto 430 00:14:37,066 --> 00:14:37,433 why they were 431 00:14:37,433 --> 00:14:39,766 given our listeners a lot to think about today 432 00:14:39,966 --> 00:14:42,166 we talked about the reasons for the market correction 433 00:14:42,166 --> 00:14:43,500 crypto's resilience 434 00:14:43,500 --> 00:14:46,100 this interesting Bitcoin January anomaly 435 00:14:46,100 --> 00:14:48,300 and how that CPI data shook things up 436 00:14:48,300 --> 00:14:49,566 I feel like I Learned a ton 437 00:14:50,166 --> 00:14:52,966 any final words of wisdom before you wrap things up 438 00:14:52,966 --> 00:14:54,833 hmm I'd say stay curious 439 00:14:54,833 --> 00:14:58,166 keep learning and don't be afraid to ask questions 440 00:14:58,266 --> 00:15:00,766 and always remember investing is a Marathon 441 00:15:00,866 --> 00:15:02,266 not a sprint well said 442 00:15:02,266 --> 00:15:02,700 alright everyone 443 00:15:02,700 --> 00:15:04,700 that's our deep dive into market corrections 444 00:15:04,700 --> 00:15:06,500 and crypto suppressing strength 445 00:15:06,600 --> 00:15:07,500 until next time 446 00:15:07,500 --> 00:15:10,266 stay informed and keep riding those waves