🎯 The non-consensus trade (right now)

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: we’ve all heard it - to make money, you have to be early. You have to be right when others are wrong. You have to go left when everyone goes right. In other words - you have to be a contrarian. So, what’s the contrarian bet today?

Let’s dig in.

🥔 Today’s meat and potatoes

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Warren Buffett says, 'the time to be greedy is when others are fearful.’

Baron Rothschild said, 'the time to buy is when there’s blood in the streets - even if it’s your own.’

And Naval Ravikant said that the way to make money in investing is to be contrarian and right.

The genius has to risk looking like a fool.

And so the sayings go.

We all know we need to go against the grain 🌾 But it’s often hard to see what the grain is - because we tend to take the consensus view for granted.

So we thought we’d do a little exercise…what is the consensus view of markets and crypto today?

Let’s have a look…

First up - the consensus views 🌾

🥇 Consensus view #1 - The stock market’s next move is down -10%.

In a survey, that’s what 72% of investment managers believe.

Stocks will go down before they go up.

That’s why investors are the most underallocated to stocks they’ve been in years.

A large part of that is rooted in this next belief…

🥈 Consensus view #2 - Interest rates will stay “higher for longer.”

Traders think there’s a ∼50% chance rates will go even higher than they already are because the job market and inflation are too hot.

Jamie Dimon, the CEO of JP Morgan, agrees. He thinks rates will go to 7%.

Even some members of the Fed have hinted that rates will go up.

So everyone’s bracing for impact because belief #3 is that…

🥉 Consensus view #3 - Higher rates are bad for risk assets (stocks, crypto, etc.)

Typically, the belief is that when interest rates 📈 = stocks 📉

That’s because stocks (which can crash 40-50%) become less attractive when you can earn 4-5% interest on “safe” money market funds or bonds.

And to most investors - crypto is just the NASDAQ on steroids.

So investors are sitting in short-term US bonds bracing for impact…

Now - for the contrarian views ⚖️

🥇 Contrarian view #1 - the next move for risk assets is up.

Contrarians think everyone is already so bearish we can only go bullish from here.

Stocks and crypto are ridiculously under-owned. The situation can only improve.

On top of that, crypto has several catalysts on the horizon - including the Bitcoin ETF and the halving.

The recession is already priced in. The bottom is in.

🥈 Contrarian view #2 - the next move for interest rates is down.

Interest rates are so high already that they’re breaking the economy.

Long-term bonds are already at 5%. They can’t and shouldn’t go much higher.

Eventually, the Federal Reserve must come to terms with the reality. It can’t fight inflation forever with high rates.

Soon, interest rates will fall again.

🥉 Contrarian view #3 - Higher rates can still benefit risk assets (stocks, crypto, etc.)

Even as the Federal Reserve raised interest rates at the fastest pace in history, this year:

• Bitcoin is up ∼66%

• The NASDAQ is up ∼38% 

• Gold is relatively steady

This means most investors who thought higher rates were bad for risky assets missed out.

The main contrarian thesis is that rates will come down soon, which is great for risky assets as investors dump bonds and cash for stocks and crypto.

But even if that doesn’t happen, higher interest rates would break the system and still drive investors to hard assets like crypto and gold.

In both cases, crypto wins.

So now you know what the options look like.

Now - tell us:

🍨 Dessert

Stories to read if you have FOMO

1/ Fidelity: “Bitcoin is the most secure, decentralized, sound digital money compared to any other digital asset.”

2/ Solana sees largest inflow in 18 months

3/ Pro-bitcoin candidate RFK drops Democratic bid to run as an Independent

🖼️ Crypto meme of the day

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