“What’s Coming Is WORSE Than a Recession” – Crypto Billionaire’s Last WARNING

Well if that's true then equities are Wildly overvalued that's true that's True it is true you would think Bitcoin Would be but then I would think that Crypto would be wildly overvalued too Yeah so billionaire investor Dan Morehead CEO of Penta Capital an American hedge fund that specializes in Cryptocurrencies currently with $4.2 Billion in assets under management gave Such interesting perspective on where The crypto market and the stock market Are headed in 2024 let's talk crypto in Just a second but let's talk about bonds Because it very well may be that the Bond market uh will have an impact I Imagine on crypto but where where do you Really think we're headed and what does This next 12 months look like to you Given given what we've even seen the Last week yeah I think we have a failure Of imagination that all working age People have never traded in a rising Rate environment I was uh I came to Wall Street in the 80s and it was already six Years you know a 40-year bull market and Everything gets bailed out by the FED Lowering rates for the last 40 years We're in a different regime because with Core inflation still so high and a whole Generation of younger investors today That haven't lived through a high Interest rate increasing environment for The last 40 years interest rates have

Primarily been trending down all working Age people have never traded in a rising Rate environment I was uh I came to Wall Street in the 80s and there was already Six years you know 40-year bull market And everything gets bailed out by the FED lowering rates for the last 40 years We're in a different regime and and the Rates uh two years ago I predicted when Fed funds were zero and the long the Tenure was 1.3 they'd both go to Five at Least we're here I think they're going Higher the normal re rate for the FED is Uh 1% overinflation we're not even there Yet right um wage inflation is double The fed's target we have record labor Strikes going on right now uh so the FED Has to keep doing more and the tenure Note is right now we're flat to Fed Funds it's typically a a premium it's Typically a 2% above INF and again this Is all projecting that both the Inflation rate and the core inflation Rate in the US is going to be stickier For longer meaning for the FED rates are Going to stay higher for longer to day You had a guy on from Jak Bob Michaels Said that that inflation's what what are You saying inflation is now you're what Number are you using well so core Inflation is 4. 4 which is more than Double the stable prices that the fed us He said inflation's already at a point Where rates are too high that's what he

Was saying oh inflation they're supposed To keep it under 2% and it's at 4.4 and Wage inflation is 4.5 and increasing Right the question is when you have you Know like a Barry Sterling will tell you That like real what he would call real Inflation he would think is when when You really calculate the full thing he Would say we're already there yeah and The question is whether you think the FED either thinks we're already there or You think even think that's real already At two % yeah because so the funny thing Is there's an owner's equivalent rent Thing in inflation and it takes 2 years To fully play through and even if houses Stayed stable for the next two years It'll still go up 1.1% according to the Atlanta Fed so there's still a lot more Inflation from two years ago that's Piped in and the case sheller home in Index is still a record high so if You're right we're talking about Increased rates not nobody lowering Rates in the next 12 months is I mean Yeah and maybe for several years right Like I think that's what people are Having a hard time thinking about is Rates could stay up for five or well if That's true then equities are wildly Overvalued that's true Dan Morehead is Projecting that the Federal Reserve will Have to keep rates again higher for Longer possibly for several years yeah

And maybe for several years right like I Think that's what people are having a Hard time thinking about and he's not Saying that a recession would last that Long but he is saying this is a Different Paradigm in markets in the Economy compared to the last 40 years Well if that's true then equities are Wildly overvalued that's true that's True it is true you would think Bitcoin Would be but then I would think that Crypto would be wildly overv valued too Yeah so uh equities probably are Overvalued because the PE is the same Level it was when rates were crashing But now rates are much higher and if you Took the normal Equity risk premium for Equities onto a 5% 10e note they should Be 23% lower than today wait equi should Be 23% Today talk about the S&P the S&P yeah And if you took it compared to its 50e Average of equity risk premium be 43% Lower and I'm not saying 43 is going to Happen but we got to keep in mind there Have been two 13-year periods that Equities didn't go up in the 2000s and In the 70s ' 80s we could see that you Think 23% is going to happen if not 43 I Think I think equities are going to go Down for the next few years and then of Course what does that mean for Bitcoin For crypto and that's why crypto is Relevant because it's not tied to

Interest rates and that's pretty rare Right tied to risk you need the FED Opening the spigots for for for Bitcoin To go up that's well the FED opening Spig in 2020 was unambigously wonderful For anything that had to fix qu it Hasn't been an inflation hedge yeah so The the the thought is it was highly Correlated last year and the what so Bitcoin is a proxy NASDAQ is what yeah So it was a very risk on asset until the Middle of last year but I think that was Cor ated with or connected to a lot of Super highly levered things like blockfi Celsius you know FTX and those are once In a generation weird occurrence there In the past and this year the Correlation of Bitcoin to the S&P 500 is Only 0.2 historically it's 0.1 so what Is it correlated to so it's it's like Some people call it digital gold because It's kind of its own thing it's not Interest rate related uh obviously bonds Are interest rate related mathematically Equities so is Dan Morhead crazy or is He the smartest guy in the room real Estate I think people are waiting for a Cut and there every time they think There might be a cut and and the FED Starts easing again that's when Bitcoin Goes because it's Fiat becomes less uh Less valuable I agree it is definitely Cyclically connected to things like that Okay but my overall view is we're in a

20-year secular bull market in Blockchain right it's a very Transformative technology it's going to Change so many different things and so Yeah you know it does squiggle a little Bit with what my take on all this is It's incredibly risky to hold Bitcoin It's even riskier to hold crypto but It's riskiest not to hold any at all I Think that equities could come down 23% Or maybe should just based on historic Valuations where do you think Bitcoin Should be valued yeah so it's a great Question is we talk to asset allocators All the time if you're thinking put Money to work in bonds I think that's Pretty dangerous put money to work in Real estate real estate is probably Coming off all-time highs uh equities I Think are overvalued that does leave a Couple of asset classes like real Commodities uh and blockchain blockchain Is a trillion dollar asset class so most Institutions have essentially zero Exposure right now uh they should you Know dial it up to a couple Percent which gets Bitcoin itself to What level I mean if it's 277 now well Bitcoin is a 14-year Trend growth of 145% a year that's kind of my general Forecast it'll just resert that and Every year it'll more than Double every year it'll more than double He's been doing it for 14 years on

Average obviously nothing else Close if it's digital gold when does it Become like gold and hit a and and never Go up again yeah oh yeah that's funny It's like 20 years when everybody has it Right now you know most institutions Really have essentially you know zero Expos be sure to click subscribe for Daily updates keeping you informed about Crypto and make sure you come out to Venice California tonight for the road Of crypto ndo and next week in Amsterdam At the Bitcoin conference link down Below uh but the other cryptos are very Important you know um there's a project Called arbitrum that's helping scale Other cryptos ethereums worked really Well they did an emerge last year Nothing happened they changed software For 200 million people overnight and it All Worked