Could the Bondpocalypse Launch Bitcoin Straight to $250K? | Bitcoin Simply

Dante Coco (0:00)

Scott Besson and the US. Treasury are doing their best to keep the beach ball of bond yields under water, and it ain't working. Despite all the emergency measures they're taking, the 10 years above 5% and mortgages are at 7.5%.

The US government debt situation goes from bad to worse, as Treasury demand from foreign buyers has fallen 80% at the same time we're having this crisis. 8-0. And this is forcing us into the great debasement trade.

Luke Gromen (0:25)

I think the debasement trade is back on, which makes me want to buy gold, Bitcoin, silver, and just accumulate.

Dante Coco (0:33)

That was Luke Gromen, one of the best macro analysts out there. And it's not just him that thinks this is a great time to buy Bitcoin. A $15 billion dollar asset manager says that we could see 200 to 250K Bitcoin in a blink of an eye. And Jeff Booth, a Bitcoin bull, says that a million dollars is too low. The bond market is breaking and sooner or later, Bitcoin is going to catch the bid. And that's exactly what we're covering today. This is Dante Coco, Bitcoin Simply.

Let's go.

Luke Gromen (1:01)

Everything we talked about on the bond side tells us the dollar debasement trade is back on. Everything we're seeing is the dollar debasement trade is back on. I don't think it ever left. I think it was all narrative bull crap that they tried to get people to think it was off, but I think it's back on. And in that world, I think Bitcoin is your hardest asset. I think gold is second hardest. I think silver, you want to own some silver too, because silver's got the industrial kicker that we were just talking about of...

Dante Coco (1:23)

Hold on, Luke Roman said we already talked about bonds, but we haven't talked about bonds yet, so let's get into it. If you're just catching up, what happened yesterday was the bond apocalypse, they would say. The five-year treasury auction was so bad that it sent the 10-year and other rates soaring. The US treasury situation is an absolute clown show. I mean, we are in a worse situation than the New York Giants after losing Jackson Dart and hoping that your season can be saved by Jameis Winston. The 10-year treasuries hit a 19-year high and mortgages are almost 8%.

That 10-year price is what sets the prices for almost every American loan or credit instrument that you get. And they're saying it could go higher as there's a 70% chance that rates are hiked in October. The US debt is growing at $2 trillion a year due to government spending. They issue $1 trillion worth of debt into the markets and with their new buyback operation going from $2 billion to $4 billion, they're now increasing their buybacks to almost 16% of their total issuance. What they're trying to do at the same time is cover up the hole caused by the lack of demand for foreign buyers of US treasuries, which has fallen by 80% in the last 12 months. They know we're in a tough spot and they're fleeing to hard assets. And this is why the debasement trade is on. Luke Grumman says it well, The Fed is going to lose. They just have to figure out which way they want to lose the long end of the curve, meaning the 10 year, 20 year and 30 year yields. They cut rates, inflation gets more out of hand than it already is, asset prices continue to inflate higher than they already are, and you risk not getting re-elected. You risk the economy running too hot and things becoming unaffordable. You hike rates, the amount that you owe in debt grows, the economy slows, and you must print. Which way do you want to lose? But there's people who are out of touch right now who says that 5% yields is just completely normal. Investors like Howard Marks.

Howard Marks (3:10)

Well, these are not high rates.

These are some of the lowest rates of the last 50 years. And they're just a little higher than they used to be. And the strength of the economy tends to produce higher rates, add in the need to finance 2 trillion of deficit a year, add in demand for AI infrastructure, and you're bound to get rates that are normal or a little higher. It makes sense.

SPEAKER_4 (3:42)

It may be normal on a 50-year basis, but life is relative. So you have, I think, a lot of folks who've been living with very low interest rates for a very long time. They've got in mortgages, potentially at lower rates. They've been living off of credit cards at much lower rates. And so everything then jumps up.