Uh is a lot of this just based on leverage or like how would you uh, if you were a doctor, trying to diagnose the problem, we see what the side effects are in terms of a lot of the contagion but like where can you pinpoint exactly what Has driven this or caused a lot of the issues yeah? So a lot of the leverage um in previous market cycles was was in these derivative markets that were built out. You can think of the bitnexus of the world, the finances of the world thats pretty transparent. We saw that this cycle was with the rise of defy uh added another layer of leverage um, so you had all these funds um all these all these kind of market participants that were stacking leverage on top of leverage on top of leverage uh and while and While the you know the cycle was going, the bulmark was in full force, uh everything worked fine uh, but on the other side of this uh were seeing a lot of that get wiped out and purged, and so i still think there is some leverage out there. There is some bad debt that probably ends up liquidated uh. I think thats kind of the slow grind were in its just its just purging the market of all that debt yeah its fascinating to kind of think. Through this you got some charts here. Maybe lets go through those and then well come back to bitcoin and crypto um youve got the u.

s equity plus all u.s bonds, market value uh, not going so hot big big drawdown here. What is this showing us? Yeah, total bond market equity market uh value uh? Basically lost from all time highs as a percent of gdp um, so historic, drawdown and record time um, even surpassing the covid lows right. So you could just see we had this everything bubble. Thats thats deflating faster than i think most market participants could have expected um. This is a result of of soaring yields, um, obviously we know the energy and commodity situation and so not just crypto specific. Obviously i think, if you add, you know, add crypto in here um. It would be another trillion two trillion dollars of kind of wealth, destruction. Um but but really you know, bond and equity markets have lost almost 16 trillion dollars and thats just the u.s market so include global markets and its a lot uglier. So i think its important to just have some kind of context, obviously bitcoins taking a beating but its not isolated and really its about the liquidity time falling out yeah i mean this is just wild when you see it its more than the 2008 uh financial crisis, Its more than the covid crisis, just absolute off a cliff uh drawdown there. When we look at treasury bond futures. What are you seeing here, yeah just kind of another way to visualize this right? The treasury bond, the u.s treasury bond is the driving force and all global mark, its uh, its still as king.

The dollar still is king at the moment, uh still as a world reserve currency and so uh. These are long dated treasury bond, futures, uh and theyre. Getting killed right so so the bond bubble right people like to talk about that green market bubble. If you want to think of like uh the everything bubble, but really what it was was, it was a global bond bubble, um and with with this record inflation um, and there was high inflation for a while, but as it continued to accelerate the bond market realized. You know these bondholders you they were the patsies at the table and so thats. This sell off and bond is really whats, causing this pullback everywhere else um. As yields soar higher and people realize that um, you know that the net present value of their assets as as duration, gets killed, and you can think of the duration aspect as as yields rise, so the value of a growth stock. Why does it come down when yields rise? Well, when youre doing cash flow models, and you have to account for rising costs of capital, even if, in real terms, its still negative uh with current inflation uh? This is why uh, really? This is like kind of another way to view that liquidity tide is when is when bonds are getting killed. This is treasury bond futures when the long dated treasury is getting killed, its its going to be a tough environment for risk.

Weve got the dollar currency index. Here and its just up only uh looks like what uh, bitcoin and crypto used to look like uh, but now its the dollar strengthening against uh. You know other fiat currencies. How do you look at this in the macro environment yeah? So we can talk about consumer price inflation now its obviously top of everyones mind its important to understand that were kind of in this max paying scenario where inflation inflation is soaring risk assets are selling off at the same time that the dollar, which is the world Reserve currency is, is strengthening against almost all global fiats, so the euro, the yen in particular, um, especially the yen where the japanese, the bank of japan, are conducting yield curve control. This is kind of that max payne scenario for not for not us citizens, but global citizens, especially emerging markets with dollar denominated debt. Uh the dollar source higher. This essentially plunges the world into recession, so uh the fed is. The fed actually has uh kind of a lot, a lot of power um right now and are making up for their policy error. Uh. With this, this rapid tightening policy so uh the higher the dixie go its a dollar currency index, even if theres, a relative uh decay in the dollars, purchasing power and real goods and services uh. This can cause a lot of a lot of pain for global risk and thats thats whats playing out yeah.

I mean its just crazy to watch all this uh and the interconnectedness i think of these various assets. As the the macro environment unfolds, weve got bond market volatility up and equity market volatility up as well. How do you think about these two yeah were, i think, were headed for kind of a a point of singularity or uh. You know a reckoning point weve, obviously had a lot of pain in equities, a lot of pain and bonds. A lot of pain is bitcoin, crypto um, but i think this all kind of ends or not ends but its coming to a head uh with with a blowout in in spreads below and volatility in the equity and bond market and maybe even uh further volatility in Bitcoin, even though thats thats quite volatile um, so especially bond market volatility, when you have the most liquid asset in the world, the asset class uh, the bond market trading uh with this level of volatility not seen since really oh wait were surpassing those those cobot highs. As we speak uh you know the worlds in trouble or really you know. Global risk assets are in trouble, asset, financial markets and so uh, probably equity market volatility, bond market volatility, uh explode, higher and certainly dont think that the high for the vix has been put in uh, and so you know spell some trouble for risk assets. I think were in a little bit of a bear market rally here.

Uh, but most of this stuff is the charts are saying that the worst uh the worst isnt over and how would you measure uh how bad it could get like the worst isnt over, but is there anything on these charts, specifically around market volatility? That would signal uh, okay. This is where my expectation would be. Is it just hey? Where was the covet high or where was the global financial uh crisis high yeah its tough to conduct? You know technical analysis on on volatility, charts with the vix. I mean certain people try to do it and maybe maybe it works, but i really think what it comes down to it. Its somewhat uh im not unfortunate, but its somewhat comical that were at this point, where were all just waiting for a fed pivot, but essentially theres so much debt out there theres so much dollars nominated that uh and theres, and yields continue to rise where the entire Worlds, just essentially waiting for the fed to cause enough pain for them to pivot um. So, every time you see these these blowouts and volatility, what brings it back in is is easing a central bank stimulus, its not a free market force, um and thats important to understand. So i think ultimately, what were headed towards is an absolute explosion of volatility. Uh and a reaction by kind of uh central bank – and you know a fiscal and monetary response – is what were headed towards.

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