High rates and performance chasing drag crypto
The guest argued that high nominal interest rates and a retail rotation into tech stocks are creating structural headwinds for cryptocurrency.
The argument
Because crypto is a non-interest-bearing asset class, elevated interest rates reduce its relative appeal. Additionally, retail 'tourists' who entered via ETFs are reportedly rotating capital out of stagnant crypto assets and into high-performing tech and AI equities.
The thesis, stress-tested
✓ What validates it
- ✓Continued net outflows from major spot Bitcoin and Ethereum ETFs
- ✓Persistent low implied volatility in Bitcoin options markets
▸ Risks discussed
- ▸A sudden drop in interest rates could restore the appeal of non-interest-bearing assets
- ▸A broader market correction could drive safe-haven flows back into Bitcoin
Hear it yourself
"And that by by that, I mean, we seem to rally on each positive story about some sort of resolution to the situation, something that might reopen the straight. And so far, as we're taping this, yeah, there was another good there was another positive story this morning coming out of Axios. But for the for the most part, basically, we're o four however many there have been. I'm not I I I lose count of how many there have been. But and while oil and bonds tend to give back their decline well, yields give back their declines and bond and oil futures give back their declines. When the stories don't come to pass, stocks haven't really given back anything."
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