BREAKDOWN: Why Bitcoin and Crypto Are Crashing
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 6 January 2022
⏱️ 19 minutes
🧾️ Download transcript
Summary
Spoiler alert: It’s the Fed – same as every other risk asset.
This episode is sponsored by Nexo, Abra and FTX US.
Today on “The Breakdown,” NLW looks at one of the most important relationships in economics: the relationship between Fed statements and market actions. With bitcoin cratering under $43,000 NLW explores:
- The Fed’s relationship with markets in general
- Bitcoin’s relationship with equities
- FinTwit and Crypto Twitter’s reaction to the dip
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“The Breakdown '' is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and Michele Musso, research by Scott Hill and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Time” by OBOY. Image credit: Bloomberg/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.2 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:14.9 | The breakdown is sponsored by nexo.io, Abra, and FTX, and produced and distributed by CoinDesk. |
| 0:23.7 | What's going on, guys? It is Thursday, January 6th. Welcome back to The Breakdown. |
| 0:28.2 | If you're enjoying the show, give it five stars, leave a rating, or join the Discord community. |
| 0:34.1 | It's been growing very quickly recently. There's a lot more discussions going on. You can find that |
| 0:38.6 | address in the show notes, or you can go to bit.ly slash breakdown pod, bitly slash breakdown pod. |
| 0:46.4 | Also, as always, as they're now a sponsor, I do marketing at FTX, so that is a disclosure. |
| 0:52.1 | So to today's topic, just a few days in, and we've got our first big |
| 0:57.6 | crypto macro Fed show. The markets have been brutal for the last 24 hours, but hopefully this show |
| 1:04.5 | helps you put them in context. So let's do a little primer on the Fed and markets in crypto, |
| 1:09.9 | just for those of you who might be |
| 1:11.2 | joining us for the first time or who are still new in this journey. |
| 1:15.1 | So, the Fed's relationship with markets, if you can't already tell, it's a little Pavlovian, |
| 1:20.8 | right? |
| 1:21.4 | When the Fed signals cheap money, lower interest rates, more support in terms of asset purchases, more liquidity. |
| 1:28.9 | Financial market actors respond positively. And part of what the accumulation of that is, |
| 1:34.8 | is that they feel like they can take more risk. That benefits all risk assets, of course, |
| 1:40.1 | but it certainly benefits the riskiest the most because some additional number of actors or |
| 1:44.6 | percentage of the market feels like they can move even farther out on the risk spectrum. |
| 1:49.7 | Indeed, in the extreme, they feel like they have to. |
| 1:52.7 | This is sort of the story of the last, I don't know, 15 years or so in market history. |
... |
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