Bitcoin's Stumble and the Bond Market's Moment of Truth: DB- Jan11,2021

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 11 January 2021

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

Real Vision managing editor Ed Harrison is joined by editor Jack Farley to break down the interplay between interest rates and duration and why lower interest rates cause growth stocks to explode higher as well as what rising yields mean for risk assets and the dollar. Ed and Jack discuss Bitcoin, analyzing its volatility profile as well as its correlation to other cryptocurrencies and to traditional financial assets such as stocks and bonds. Since Bitcoin is in the hands of more institutional investors, who also own and trade traditional assets, Ed and Jack also explore whether the success of Raoul’s “wall of money” thesis means that Bitcoin will be more positively correlated to stocks and bonds going forward. Lastly, Ed shares several market dislocations that are on his horizon which are shaping his macro framework and trade ideas. In the intro, Real Vision’s Haley Draznin explains why market sentiment is dim on Monday, a modest reversal after last week’s strong start to 2021. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Welcome to the daily briefing. It's Monday, January 11th. Soon I'm going to be joined by Real Vision Managing Editor Ed Harrison, but first with
0:15.7	the day's stories, Haley Drasman.
0:17.7	Hey Jack, market sentiment is dim on Monday. It's a modest reversal after last week's strong start to 2021 for equities.
0:26.8	Investors are confronting a number of both political and regulatory risks.
0:30.8	To start, Twitter fell after the social media platform permanently banned
0:35.2	President Trump's account after last week's insurrection of the capital. This
0:40.1	shows the company is making editorial decisions and opens the door to more regulation
0:45.6	of social media under the Biden administration.
0:49.1	Shares of Facebook which also suspended Trump's account also declined, and House Speaker Nancy Pelosi on the political front
0:56.6	announced that the House may move to impeach President Trump as soon as
1:01.6	this week that's if Vice President Pence does not choose to invoke the 25th
1:07.2	amendment.
1:08.2	Stimulus efforts might be slowed as a result of this, and last week's rise in the markets was really attributed on
1:15.5	bets that the Biden administration would push another round of aid under
1:20.4	the Democratic-controlled Congress. We saw the dollar up Monday, which has been lifted since U.S. Treasury yields rose last week.
1:28.8	Again, this was on bets that the Democratic Controlled Congress would mean more stimulus for the U.S. economy,
1:36.1	feeding into inflation and an uptick in economic growth.
1:40.1	With the 10-year Treasury note yield logging its largest weekly rise since June, the move in
1:46.8	yields could prompt investors to really rethink 2021 strategies. Yields which move in the opposite direction of bond prices edged a bit higher on Monday.
1:57.2	It's interesting with the dollar up.
1:59.2	Bitcoin is seeing its first major correction of 2021, selling off over 25% from its high of nearly 42,000
2:08.3	at the end of last week.
	...

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