How Bitcoin can outperform all cryptocurrencies after the banking crisis | Analyst explains

The ongoing banking crisis seems to be a Pivotal moment for the Global Financial System and for crypto after the shutdown Of two major crypto friendly bags the Position of the crypto industry in the US looks increasingly precarious on the Other hand the confidence in traditional Bags has been shaken and people are Forced to look for Alternatives Bitcoin An asset without counterparty risk that Can be self-casted it may be that Alternative so what are the broader Implications of the banking crisis on The crypto Market is this the Catalyst That will kick off the next Bitcoin bull Run to find out I talked with microgron The senior commodity strategist at Bloomberg intelligence I'm Giovanni on This show we challenge the ideas that Shape the world of crypto in each Episode we assess a crypto narrative a Macroeconomic Outlook or a potentially Disruptive technology only the most Solid ideas will make it to the other Side Foreign We just want to get a sense of what you Think about the latest banking crisis And its relation with the crypto markets So in a recent interview you said that The current banking crisis is defining The value of Bitcoin can you explain Exactly what you meant by that so the Bitcoin was born out of the last

Significant financial crisis or the Great financial crisis in 2009 and I Think this one's it's in the process of Defining Bitcoin of global digital Collateral now that's the current state Um Bitcoin has done very well bouncing Back above 25 000 resistance at the time we're taping This on Wednesday it's around twenty Seven thousand while the stock market Still is under pressure and I think What's happening is we're seeing a Significant rally in bit this Bitcoin This year up to about 73 percent Obviously it was two two oversold last Year but partly because people are Realizing that it's becoming more like Cold and U.S treasury bonds but just a Higher beta version of gold Um and it's getting that gaining Accolades as Um maybe not as so much a store value Yet but it's Global digital collateral In the world that's going digital so This financial crisis is quite Significant and it's defining it and I Think people are realizing the thing About Bitcoin it's no one's project and No one's liability and it's completely Independent like gold the thing is it Has a definable definition diminishing Supply and it's so low as far as Adoption in so early days and this seems To be the trigger the banking crisis I

Think when people realize oh my money May not be so safe in a fractional Reserve banking system it might be safer In a fully collateralized Um stablecoin or crypto dollar it seems To be hitting that inflection point that I've been looking for a while I'm just Kind of you know during the headlights Watching wow is it really finally Happening there used to be a narrative That's a defined Bitcoin as uh hedge Against inflation and would you say that Now this narrative has transitioned into Bitcoin as a hedge against Banking risks I I think it's going there Um because I never believed in the Hedge Against inflation because that's so long Term it Bitcoin needs to be around for I Think decades before that happened it's Still just a baby it's just evolving It's so early days it's such a small Portion of global portfolios Um but as far as a potential hedge Against banking issues yeah I mean it's Coming up they're like with gold and And um and treasury bonds now that's Just a high beta high risk version but I Think it's people are realizing well I Really probably have to have some of This particularly if I'm looking to get Away from risk assets like the stock Market this Bitcoin stuff is if the Stock market if risk assets do recover

It's probably gonna outperform I just Want to touch upon some of the fears That the web have been going around for Quite a while in the US because a lot of People were talking about this operation Choc Point 2.0 which is basically this Uh narrative According to which the United States authorities are trying to Debank crypto in the US how big of a Threat is that Um are you not concerned about this Trend Surely concerned but I think it's much More short-term fear-mongering and it's Typically not going to last it's part of What this is an overwhelming rapidly Advancing technology and most astute Smart people in this country get it some Don't they might be in incumbents in Power but like all the major changes in History even like the key thing the obit Development of Euro dollars that was not Really you know the trading of U.S Dollars offshore and Banks was that Really supported by the US government But we're seeing I think this just Overwhelming so I think um I don't know Where that's going to go I do know if The current Administration continues to Push back they're likely to be voted out In two years anyhow like a chairman of The sec's but two years left and Um Don't I don't know when I had to Define

That so much but it just means that it's Going to be a pushback in the shorter Term but in a bigger picture it's really Going to be hard to stop this technology We know that the growth of the price of Bitcoin still is uh very sensitive Towards the uh us fed monetary policies And how aggressive this money monetary Policies are being handled so a lot of People uh saw this backing crisis as This turning point where the FED is Going to say we have been tightening too Hard and now we are basically being hit By by the by the collateral effect of That so a lot of those Banks collapse Because of the uh because of the two Aggressive hike of interest rates that Have been conducted in the last few Months so Um today we saw that all the eyes were Pointed at the FED seeing whether the Fed was was going to hike more or or Stop and try to kind of uh Um basically prevent this banking crisis From uh from continuing so what is your Reaction to the fed's decision today They height rates again Um the EC Bean did um a week ago 50 Basis points and Um it's probably the last hike Market Sorted pricing for easing a little bit Of easy not a lot yet but the bottom Line is they're potentially tiltiness Towards a significant recession

Potentially depression I mean the hike Into you can't be a hawk in a bank run Is the quote from my colleague tomorak He's our chief Economist and he wrote That a little while ago and they just Did I can we were having a big run so The ECB this is a global bank run and it Potentially potentially this country is Just getting started remember it's Basically only been a year and one week Since the first hike the most aggressive Hikes on a global basis ever and there's This rule of long and variable lags so What I see is the bank situation is a Tree in the force of what I've been Pointing out for a while Commodities Collapsing now let's just start getting Started because everything is tilting Towards recession except things like Unemployment and on unemployment can Only go one way it's so low it can only Go up which means the recession is Virtually guaranteed you look at things Like the yield curve so I think the FED Is just way far behind like they were so Far behind in inflation now that Inflation is potentially collapsing and I'll point that in a second The leading in Cagers peaking housing The banking crisis Commodities means They should have stopped and they still Hiked raids so I fully see looking Forward we're going to have official Acknowledgment of deflation other from

Government statistics not from Forward-looking things like my Commodities and the FED Titan right so They're so far behind the key thing We're going to end with we're going to Find out what and get Is Now by this Time next year Giovanni when we're Talking I'm pretty sure we're gonna be talking About a significant enduring Deflationary forces the FED not easing With the ease that it has in the past Everybody is waiting for the moment when The next crypto bull market will kick Off uh so has this banking price Accelerated this perspective or it has Made it far further away what is your View on on this I think the answer is yes it's kicking Off a next Bull Run but it's very much Subject to the ebbing tide of the stock Market I'm we're talking right now with The S P 500 around 4 000 I feel expected To go to 3 000 in a recession a normal Recession which is predicted the highest Probability in since 1982 from the yield Curve Um and that's going to be a pressure Factor in Bitcoin but potentially you're Hitting that inflection now where this Recession is going to be great for Things like gold and long bonds and the Thing is is Bitcoin in there I think It's hitting that but it's just hard to

Say for sure Um but I think the more the Bitcoin can Sustain above 25 000 and the more the S P 500 potentially pressures below 4 000 You can have an indication that Um Bitcoin is just going to take off and We have to get there to touch upon your View on the crypto dollar so the stable Coins uh dollar back stable coins what We saw is that so very Respected stable coin usdc had a Significant amount of their reserves in A bank that was a Silicon Valley Bank it Collapsed and it lost its bag for for a Little while so that kind of showed how This crypto dollars can also be very Vulnerable to this sort of Rises what is You what is your view on that Um it's funny it's a unique that the Problem with the new the fintech and the New technology was the Old Guard Technology it's depositing the bank That's the extent that it dropped um Because of the potential that this its Bank deposit which is fractionally Reserved was not safe so the what's it's Proving is these fully collateralized Crypto dollars potentially are much Safer than Banks there's no FDIC Insurance needed it needs obviously Needs regulation that's just a matter of Time it's how the U.S regulates it That's going to matter but it's Happening offshore things like we've

Seen a major move away from usdc back Towards tether tether is the biggest one It's controversial but I've been just Filing tethers since it was around 2 Billion back in 2018 it just keeps going Up with bumps in the road why because I Think it's like what's happening with You what happened with Euro dollars About five decades ago when entities Needed access to the dollar away from The U.S banking system they did it in Banks outside the U.S and created Eurodaux system this is happening in Crypto dollars it's happening fast the Technology is overwhelming we know that Now Um ethereum is going to Um turn fully fully proof of stake by Allowing this staking so with the Shanghai upgrade what do you think is Ethereum going to outperform bitcoin This year So it hasn't been I think we're at the Stage now that Bitcoin is going to Outperform virtually all crypto assets If my base case of a severe global Economic reset recession is hands out That's my base case I think Bitcoin will Continue outperforming I see ethereum Right now stuck between a thousand and Two thousand now it's at 1700 2000 is Very good resistance it is the base Layer for tokenization crypto dollars And things like that but now we're in

That stage where I think Um if I'm correct the stock market goes Closer to three thousand s p i 500 and Golden and treasury Bonds outperform in This significant recession in the US Then I think Bitcoin will outperform Virtually all cryptos including ethereum That's been the case so far this year It's the existing Trend and I think it's Going to more like the accelerate so we Have to get through this bump in the Road and I think the bottom line to Remember from my standpoint as a Strategist it's my duty to warn people When I see a hurricane coming I see a Hurricane coming economically man it's Just based on what you see we started Spoke about earlier and it's Central Bank's tightening despite a bank crisis And despite forward-looking deflationary Forces Bitcoin will probably be the best Performer among the cryptos including Ethereum well Greg awesome Um thanks Dr Mike for giving again your Outlook in this uh uh complicated times And uh yeah let's talk again very soon Looking forward to Giovanni and thanks For having me on