👀 It's happening

GM everyone. This is 2036. We scroll for gems all day so you don’t have to.

Here’s what we’re serving up today 🍲: tech stocks had one of their worst days in years yesterday. Yet bitcoin is up 📈. What does this mean for crypto from now on?

Let’s dig in.

Yesterday, stocks took an unprecedented beating. Google’s parent company Alphabet dropped -10%.

Remember that only 7 stocks in the S&P500 are up this year - all in technology.

They’ve been dubbed the Magnificent Seven.

These carried the entire S&P up this year. And yesterday, they took a hit, dragging everything down.

But technology stocks weren’t alone.

Banks - the alleged stewards of our money - are also in freefall. Since the Fed started raising rates, their stocks are down -50%.

Banks bought trillions of $$ of US government bonds - which also have collapsed.

That’s because higher interest rates mean lower bond prices.

Bonds are now down more from their last high than bitcoin:

As a result, banks - that bought a sh*t ton of bonds - are sitting on hundreds of billions of dollars of unrealized losses. That’s what brought down Silicon Valley Bank in March.

So, stocks are down. And bonds - the supposed “safe assets” are down too.

The classic 60/40 portfolio is getting obliterated.

Thank you, financial advisors and wealth managers. So much for preserving the wealth of tens of millions of baby boomers.

On top of collapsing asset prices, we have:

• the worst inflation in 41 years

• the fastest interest rate hike in history

• war in both Ukraine and the Middle East - and tension in Taiwan

… just after the worst pandemic in 100 years and unprecedented money printing.

Yikes.

So what’s going on?

To bring down inflation, central banks raised interest rates. But higher interest rates are crushing the financial system.

Governments keep spending money they don’t have by issuing bonds. So far this month, the US national debt has already increased by $500 BILLION.

But the market has a message for the US government: its bonds - supposedly the safest in the world - are not so safe anymore.

The Fed might not need to raise rates anymore. The market is doing it for them by dumping US bonds at an unprecedented rate.

As a result, in August, Fitch downgraded the quality of US government bonds.

Yet the US is blind to the reality.

Last week, the US Treasury Secretary said that, of course, the US could fund Ukraine and Israel, defend Taiwan, and maintain a strong economy at home.

This only sent US borrowing costs to their highest level in decades.

Now - we’re not doomsayers here at 2036. On the contrary, we’re eternal optimists.

But the traditional financial system is broken.

Most financial advisors, wealth managers and private bankers completely ignore this.

They continue to buy bonds as “quality” investments to protect investors from volatility - when they’re down -50% during unprecedented chaos and uncertainty.

It’s completely insane.

But here’s the thing: in periods of rising interest rates, assets like gold and bitcoin should be falling 📉.

Except they’re not. Since the beginning of the pandemic, bitcoin is up +615%.

Yet most financial “experts” still consider bitcoin a “risky gamble.”

It’s ludicrous.

This is the classic tale of hubris and incompetence. And it marks the beginning of a new paradigm: the decoupling of bitcoin from all other assets.

Capital is looking for new stores of value. It knows the US can’t keep recklessly spending forever.

Central bankers are running out of money. And banks are on the verge of collapse.

So savvy investors - including Blackrock’s Larry Fink - are turning to the only truly scarce asset that can’t be inflated away: bitcoin.

The numbers are clear: Bitcoin is in a category of its own. It is no longer just the NASDAQ on steroids.

Bitcoin is trading as the ultimate hedge against economic uncertainty and chaos.

And this will likely continue.

Things might be different if the US government’s #1 priority was to spend responsibly.

But we see no signs of that.

During the Great Depression of the 1920s, gold went vertical.

In today’s Great Inflation, it’s bitcoin’s time to shine.

1/ Arthur Hayes: BTC is rallying over military spending

2/ Blackrock could be buying BTC this month already

3/ GBTC now a better investment than NVIDIA