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| By Juan Villaverde |
On a recent 13-hour flight back home to Spain from Uruguay, I had plenty time to ponder what awaits the world in 2024 and the shape of the emerging macro landscape.
So, I did. I considered the near-acute liquidity crisis the U.S. Treasury market faced last October …
A crisis that was temporarily alleviated by Federal Reserve Chair Jerome Powell's change in stance regarding the Fed's interest rate policy and economic outlook.
After all, it was in October when rates peaked, and the Fed shifted its forecast from a stable 2024 economy to a high likelihood of recession.
Investors, in an almost Pavlovian response, rushed to the “safety” of the Treasury market.
A few months later, the Fed further bolstered this sentiment by promising rate cuts this year, boosting demand for Uncle Sam's debt.
So, for overindebted Western nations, 2024 likely marks the endgame of the sovereign debt bubble.
From the 2008 Global Financial Crisis to COVID and every crisis in between, Western governments have repeatedly bailed out the private sector.
Backed by the implicit guarantee of the printing press, they accomplished this by becoming de facto lender of last resort.
And let's not forget the West's geopolitical ambitions, committing openly to conflicts across the globe. These endeavors are backed by — you guessed it — Western sovereign bond markets.
Ultimately, however, it’s taxpayers like us who will be forced to foot the bill.
But all this pales in comparison to the significance of the SEC approving the first spot Bitcoin (BTC, “A-”) ETFs.
Already, there are whispers of firms scrambling to source physical Bitcoin for their ETFs. Large firms, including trillion-dollar giant BlackRock (BLK), are openly competing to hoard Bitcoin, an asset whose limited supply will inevitably drive prices skyward.
And no wonder, considering that the first 24 hours of trading alone racked up $2.4 billion in trading volume across the ETFs.
This is arguably the most bullish catalyst yet for Bitcoin. And it’s going to release a torrent of fresh demand for crypto, spurring a significant price surge over the medium to long term.
Crypto is already the asset class of the decade, with Bitcoin already the highest returning asset in history.
And it is poised for even better years ahead.
Moreover, a spot ETF approval isn’t just a milestone. It’s an inflection point.
After years of resistance, Wall Street is finally embracing blockchain technology, lending it their stamp of approval.
This historic moment in crypto signifies an epic turning point.
Now that the spot Bitcoin ETFs have been approved, we expect Bitcoin to enter a much needed 80-day-cycle correction.
This is long overdue, but don’t expect the downside action to snuff out all the excitement. After all, once the correction is over, investors will be looking ahead to the halving.
There’s still plenty to be excited about regarding Bitcoin.
For the altcoins, the average trajectory remains somewhat less certain. That’s because some have begun their 80-day-cycle corrections, while others have not.
What all this adds up to is a growing near-term likelihood of lower prices. But this in no way obscures a profoundly bullish big picture.
Decentralized blockchains and their publicly traded assets will eventually make many traditional financial players obsolete. But for now, these firms are realizing that embracing this breakthrough technology is the only way forward.
Either adapt, or risk extinction.
So, I suggest you seize this historic opportunity in crypto.
To that end, I suggest watching my recent Crypto Convergence briefing. In it, I go further into why this approval is only the beginning. And I name three altcoins investors should consider owning moving forward.
But I urge you to watch it soon. We’ll be taking it offline soon.
Best,
Juan Villaverde
