Loading summary
Transcript21 lines
- [00:00]
Ryan Reynolds
Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do@mintmobile.com.
- [00:18]
Mint Mobile Representative
Switch upfront payment of $45 for three month plan equivalent to $15 per month. Required intro rate first three months only, then full price plan options available, taxes and fees extra. See full terms@mintmobile.com so here we are today at 95,000.
- [00:34]
Dan Taparo
If we took short rates down back to zero, I think bitcoin would be probably closer to 300,000. Now I don't think they're going to zero just because the interest rate is a reflection of how much liquidity is being put into the system. And it's a whole bunch of other things. But this is just my back of the envelope. Guess we take the two year note back down to around 2%. Bitcoin's at 180. 180,000 with nothing else changed.
- [01:10]
Host
10T Holdings CEO and founder Dan Taparo joins the show now. Dan, welcome to Markets Daily.
- [01:18]
Dan Taparo
My pleasure to be here.
- [01:20]
Host
All right, I want to talk about some of what you've been saying on social media. I know that you tweeted recently about macro data that's signaling an economic slowdown. Talk to me a little bit about what you're watching. What should we be watching as we look to interpret what's going on in the economy and apply that to our investment strategies?
- [01:38]
Dan Taparo
Yeah, I, I think the way, you know, I was a long time for over 20 years as macro hedge fund manager, portfolio manager. And I basically, people, you know, don't really realize this. I probably spent, you know, essentially eight hours a day reading. You know, I was not trading every moment and this and that. You don't really do that. You do a lot of research, a lot of thinking and then you position and you have risk parameters around that. And what I was doing was essentially looking for outliers, looking for pieces of data that maybe weren't that obvious, that reflected something about a reality that I thought the market didn't know. And in any investment process, that's sort of what you're doing. But with macro, you're looking for these, I would call sort of second derivative pieces of data, little more esoteric pieces of data that turn at the right moments. And so I think the other day what you're referring to is the Richmond Manufacturing survey from the Fed, the employment component of it. Okay, so this is the employment component of a regional Federal Reserve survey. So not something that let's say is on the front page of the Wall Street Journal, but it collapsed down to a level where we were in 08, and it's actually below where we were during COVID Now, if you remember, during COVID the unemployment spiked pretty dramatically and 08, it was also very bad. And so right now, it sort of strikes me as funny, things don't feel that bad. The economy is still growing. We've had some issues out there with fiscal tightening being as aggressive as it has been with DOGE being active with federal spending being cut back, uncertainty on the tariffs. All those things are what I call fiscal tightening, fiscal austerity. And we don't have an offset on the monetary side, which ordinarily we do. The Federal Reserve has said for now that they're more concerned about inflation than they are about, you know, the slowing economy. I think you're going to, you're going to hear a change in their voice soon. So when I see a piece of data like that, I love posting it on Twitter because I feel like people out there, they're just not aware of these, you know, I would call them lesser data of lesser importance, but really like of, of of lesser importance or. But what you do is if you get 10 pieces of data like that that are showing you something that is very different than like what the market or what the populace or what the Wall Street Journal or whatever, whatever they're thinking, it tends to be, if you can get enough data, points a view into the future. And so that piece of data is very rare. Right? You could, you could almost argue in 40 years it's not been signaling that employment is going to be as weak in this survey as it is right now. That's. That seems to me a bit funny. I mean, a bit, you know, of an outlier. But then when I start getting 2, 3, 4, 5 things like that, I keep posting them, then that makes me think, okay, I know some, I'm a little ahead of the Fed here. The Fed hasn't gone, hasn't changed their posture publicly yet. And I think that the US two year note, which is the most sensitive indicator to macro US macro data, is leading federal funds rate. So the two year note yesterday hit 3.69. And the funds rate is, I mean, and the funds rate is over 4%. So I think the two years leading it down and I Think over the next six months, we could definitely see the Fed cut interest rates. And it's because there's a lot of data like this underneath the surface that is responding to uncertainty, concerns that tariffs may end up being too severe. And economic data can be shaped by expectations as much as by actual data, if you follow what I'm saying. A CEO can say, I'm confused by all the things going on in D.C. those 2,000 people that I was planning on hiring, well, I'm going to hold off. I'm not going to hire them. And if all those CEOs say that, at the same time it actually has a tremendous impact on the underlying economy. And that's called reflexivity. And, and that's the famous concept that George Soros first wrote about in the early in the mid-80s called the, in the Alchemy of finance book. And most macro trading is essentially, you know, a process of interpreting reflexivity before it kind of kicks in.
- [06:40]
Host
Well, tell me a little bit more about that, Dan. I mean, in the next six months, what do you expect to see from the Fed? You said you expect at least one interest rate cut. You expect a few. How many do you expect and what will that look like?
- [06:52]
Dan Taparo
I think, I think it's more about where the rates go and where liquidity goes. So given the economic data, I could. The two year was at 369. I put a chart out yesterday. I could see it easily dropping 100 basis points. So it could go to two and a half. And whether the Fed cuts or not, I think the market rate will go to two and a half. And I think the dollar potentially could drop another, you know, 5, 10% here. I was wrong on the dollar. I'd originally thought it would stay strong, but given the amount of fiscal tightening that's gone on, I think we're going to need a monetary offset to cushion some of this austerity. And it'll come through the interest rate and then it'll also come through a lower dollar.
- [07:40]
Host
And now tie that together for our audience. What does that mean for crypto markets?
- [07:45]
Dan Taparo
To the mood? Yeah, well, yeah, I know. I think it's, I think it's very bullish. I mean, look, let's step back and think about this for a second. Bitcoin is. Where is it today? 90.
- [07:58]
Host
Around 95,000.
- [07:59]
Dan Taparo
Last night, 5,000. So Bitcoin is at 95,000. The two year note is, call it, you know, 3.7. All right. In 2021, the interest rate was zero. Okay, zero. And Bitcoin was 60,000 at the peak. So here we are today at 95,000. If we take short rates down, if we took short rates down back to zero, I think Bitcoin would be probably closer to 300,000. Now I don't think they're going to zero just because the interest rate is a reflection of how much liquidity is being put into the system. And it's a whole bunch of other things. But this is just my back of the envelope guess. We take the two year note back down to around 2%. Bitcoin's at 180, 180,000 with nothing else changed. So the fact that Bitcoin's at 95 with the interest rate here and the dollar down, you know, only sort of 5% from, you know, the last six month moving average is unbelievable. Like it is super duper strong. I know within looking at all the macro variables. So if you have a little more of a slowdown, you have this dollar weakening, you have the interest rates drop. Just that alone. Forget all the great fundamentals, all the new flow into Bitcoin, flow into Ethereum. Solana. To me I see everything. Bitcoin is the leader, Bitcoin is the core asset. But I do see the other cryptocurrencies, Solana and Ethereum have, have gained network effect. But the other ones you know, are venture products, are venture investments. But this is a whole new world. It's still very early. You know, I put this tweet out last night that got a little heat. But I think it's, it's true. I mean on mainland China, Bitcoin is still banned and in Europe, I would say Europe is still pretty hostile to Bitcoin generally. I mean it's certainly not open. So you have 2/3 of the entire world GDP from an economic perspective, from a wealth perspective, they're not really supportive and the US is. So, I don't know, it's like imagine if we had the other 2/3 of the world actually like being supportive. Where would this thing go? I just think 95 is a great, it's a much stronger price than people understand.
- [10:41]
Host
You said that bitcoin could go to $180,000 there. What's the timeline on that?
- [10:47]
Dan Taparo
I think within a year, this is the most difficult market to trade of all time. So I mean cryptocurrency generally, so I think to put too fine a point on it, you're potentially doing some damage to yourself. I think 180 is very reasonable within the next year based on the macro, based on the micro Based on developments in the digital asset world, growth in DeFi and RWAS stables, all those things, they have a flow over effect. I don't believe that it's just bitcoin and that everything else should be zero. I think everything feeds off each other. And so I've never seen interest as high in the space ever before. And now we've got a US Administration that is frankly like downright bullish and pushing for growth, pushing for regulatory clarity. And you know, with our funds, I've invested in 23 companies that are growth stage companies in the space. Companies generally making sort of 40, 50 million in revenue or higher. We have, I think, you know, three to five companies that could be public this year. And so from my perspective, I think, I would say within a year, I really do believe that the way the US Becomes the crypto blockchain capital of the world, which is what Trump wants, is to get the more developed, respected, polished companies listed in the United States. I think it's very important. I know. You know, I think eventually all things of value will be put on a blockchain. I think that's maybe five, ten years away. But equity is not going away. Equity, the concept of having equity and being a shareholder of a company that produces revenue in this digital asset ecosystem, that's not going away. I think we have a chance now to become the single place where every crypto business comes public. And I'm speaking my own book completely, but I believe this from the founding of my fund. This is what I've always thought.
- [12:59]
Host
Dan, the last thing I'm going to ask you before we wrap it up here is on crypto companies going public in the U.S. there was a, a lot of excitement at the beginning of the year. A lot of people calling this year the year of the crypto ipo. Now we're hearing some companies maybe taking a step back, kind of waiting to see what happens when it comes to regulation and legislation in the US Are we going to see as many companies go public this year as we thought we were going to in January?
- [13:26]
Dan Taparo
Well, I would say the answer X the tariff, you know, bumpiness. I would, I would have said yes, the tariff bumpiness and some of the uncertainty brought on by those, by, you know, the government policies, doge and, and the aggressive nature of them. I think it just back, back ends, it backloads it. I think it goes, I don't think the number goes down. It just gets pushed off a few months and they've announced a lot of these companies that we own Circle and Etoro, you know, there's been talk about figure. Kraken's been in the news for early next year. So I think that these companies, they're making hundreds of millions of revenue. There's a backlog of companies that should be public because of the bear phase that kicked in in 22 and 23. But the reality is this, and I say this often, I don't know anything with a 99% degree of certainty really. But I know one thing. With a 99% degree of certainty, within the next five years, Coinbase will not be the only large public crypto blockchain company in the world. And that's what it is today. Can you imagine, we've got $4 trillion of value sitting in the digital asset ecosystem between all the cryptocurrencies, all the companies, and we have one company, Coinbase, that has a market cap of 60 billion. That's it, that's public. The public I think wants to own cash flowing businesses that are in this space that are active in all these various areas. I mean stable coins alone, just think about this, four years ago were essentially at zero and last year there was $10 trillion of stablecoins settled. So I don't know if I'm an investor out there and especially an American investor and I'm looking for growth. I'm thinking how many things go from 0 to 10 trillion in four years? Like not a lot. And I think the vibrancy and the dynamism in the space, you know, I think there's huge demand for from public market investors. And so that's why I don't really see you slow this thing down. But I don't see any diminution in the interest.
- [15:59]
Host
Dan, thank you so much for joining Markets Daily today. And I know that you're going to be with us at Consensys in Toronto next month. So we'll see you there.
- [16:07]
Dan Taparo
Absolutely. Thank you. Have a good day.
- [16:11]
Host
If you want to hear more from Dan Tapiro, he will be with us at Consensys in Toronto from May 14th to 16th. You can get your tickets at consensus2025coindesk.com and we'll see you there.
- [16:27]
WIX Representative
Did you know an average of 33,000 domains get registered every day? If you've got an idea for a business, make sure you name it right away. Just search WIX domains and claim yours before someone else does. Your ideal.com/u is out there. Search WIX domains and go grab yours today.