Discover Crypto, Bitcoin & Altcoin News

SPEAKER_1 (0:00)

Bitcoin is about to face its biggest test yet.

Look at these two charts. The first one, 1979 to 1980s stagflationary blow-off top for gold, a build-out of a cup and handle, playing into a bull flag and overperforming that flag target. This is when the world economy acknowledged that we indeed had hit stagflation, a pressure that the world was not ready for. Now, stagflation is one of the worst words to say for any economic outlook of the US economy and really the world economy, but there's a reason why I'm bringing you this information, is this chart pattern on gold, the canary in the coal mine, is exactly what we have in this current market environment. You can see a very clear cup and handle playing out to a bull flag. The target once again overperforms, and now gold is coiling right around 4,300. Now, economists don't want to admit this current situation is stagflation. And the wonderful reason why is because there's been so much growth in the data center and tech sectors that PMI is screaming if you're looking at just those two metrics.

Now, this candle labeled stagflation is labeled for a reason. We had an Iranian oil crisis taking hold in 1979, playing into that inflationary outlook as oil crisis reared its ugly head. We also had Soviet takes in Afghanistan, an invasion from Russia. Inflation was taking hold in Volker. And in this environment, our Federal Reserve Chair, Volker, raised the rates. And he raised these rates into an inflation supply shock. Growth had stalled and gold became the panic trade. Whether highbrow economists want to admit it or not, this panic trade is playing out once again. It's very clear that the charts are telling us more than the news.

Rounded base, same acceleration, and gold is now sitting at that $4,300 mark. It's a different decade, but the exact same shape. This gold chart is the canary in the coal mine. 1979 did not start as a textbook play. It started as a Middle East oil rupture, hitting an economy that already had inflation psychology baked into it. Crude roughly doubled. CPN run 13 to 14%, and the bond yield exploded because the market stopped believing paper. Political theater tried to manage the rates, and Main Street got crushed. Sound familiar? Now we look at our current situation. We have another Iranian-centered oil crisis. The Hormuz Strait is squeezed. We have pipelines from Saudi Arabia being hit. This is causing a fuel crisis. Multi-hour lines, diesel shortages, sanctions on top of war damage, and oil has screamed back over $100 a barrel. To add more confluence to this, we have another Russian war grinding through the Ukraine while Moscow sweats a parliamentary vote. Treasury yields are now at 5%, the highest in a generation, the Federal Reserve hiking into an energy shock that's currently happening. While politicians demand easier money, this is not a coincidence. This is a 1979 recipe book with better cameras. And they can put lipstick on the pig all they want. They want to point at the growth. Well, let's take a look at where that growth actually is. Data center construction is now the largest slice of US private office building. $50 billion over the year, and bigger than the traditional office space at $43 billion. About 52% of the office category, and this has risen by 27% just this year. America is pouring concrete for AI. If you strip data centers out of the equation, and a lot of non-residential construction is flat to down. Offices, retail, warehouses, lodging, this is not a healthy Main Street situation. This is a K-shaped economy with a server farm put on top of it to make you look the other way.

Now, the housing industry is another tale. Mortgage rates are now near 7%.

Affordability is worse than it's ever been.

Sellers are flooding listings while buyers vanish, and you can cheer about the GDP going up all you want and still watch the American starter home dream go to death. Now, obviously, I've stayed very bullish on Bitcoin through my time here in the crypto markets for a very key reason. Bitcoin was born out of the 2008 housing collapse, a fixed supply to answer a system that prints bailouts and erodes the unit of account, which is the US dollar. As digital gold, it has largely missed the first safe haven leg. Physical gold ran, and Bitcoin still trades like a high beta risk asset when the yields rip and liquidity tightens. And this is the honest chart. It's simply just flowing in ebb and flow with its basic four-year cycle right now, with a few nuances of timing of new all-time highs. Gold has proven to be that place where the major investors chose to take their safe haven with all of this data so far.