Lyn Alden on Bitcoin, Inflation and the Potential Coming Energy Shock

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 23 June 2021

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

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Summary

Lyn Alden, investment researcher and strategist with a keen eye on both crypto and traditional markets, joins NLW on today’s “The Breakdown.” Listen for a conversation about the state of the market and projections for the future including: Inflation: base effects and transitory in nature or here to stay? Foreign debt markets tapering off The Lightning Network and predictions for the success of El Salvador Inflation at a high number, 5%, leaves investors and market observers jumpy. On top of that, many have a hard time believing the U.S. Federal Reserve’s narrative for inflation as outlined in the recent FOMC meeting. How is this inflation different from previous spikes? The foreign sector has historically been a large buyer of Treasurys in structural trade deficits. In 2013, China stepped away from this practice and started investing in its own infrastructure and in other regions across the world. Even if other countries continue to invest in U.S. assets, it is increasingly in hard assets like stocks or real estate. Will the dollar weaken as the Fed is forced to be the primary buyer of U.S. Treasurys? El Salvador’s commitment to bitcoin as legal tender is one thing, but what will the reality of this new currency look like? Bitcoin’s Lightning Network provides easy access and transaction speeds, so long as enough of the general population has access to smartphones. Lastly, with the public’s attention captured by the current inflationary moment, what market features are getting underreported? Tune in to hear Alden’s perspective on what will have an unexpected impact in the upcoming cycles, including the potential for a significant energy shock in the years to come. -- Earn up to 12% APY on Bitcoin, Ethereum, USD, EUR, GBP, Stablecoins & more. Get started at nexo.io -- Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW The Breakdown is produced and distributed by CoinDesk.com

Transcript

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0:00.0	Basically, with debt levels as high as they are and with Treasury issuance as high as it is,
0:04.2	it's pretty challenging for the Fed to normalize industry rates without crashing the markets.
0:09.0	And so they kind of find themselves where they can either let the trade stay low and let
0:13.1	these spikes of inflation, basically devalue cash and debt to a significant degree, or they
0:18.6	can try to raise rates and taper to combat that, but then they risk
0:22.0	pulling down asset valuations across the board. And because the market is so financialized,
0:27.2	if asset prices have a significant fall and stay there, that actually circles back and results in
0:32.0	slower economic growth, like the tail wagging the dog rather than the way around.
0:37.7	Welcome back to The Breakdown with me, NLW.
0:41.8	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:48.3	The breakdown is sponsored by nexo.io and circle and produced and distributed by CoinDest.
0:55.3	What's going on, guys? It is Tuesday, June 22nd, and today I am thrilled to welcome Lynn
1:00.6	Alden back to the breakdown. At this point, Lynn needs no introduction. She is one of the most
1:05.9	astute, thoughtful and eloquent observers of markets, both crypto and traditional, and is just about the
1:12.0	best guide out there to help understand what actually is going on. In this conversation, we talk about
1:18.1	inflation, the FOMC meeting's latest changes, dislocations in the repo markets, Bitcoin, lightning,
1:25.4	foreign debt holdings, and so much more. It's a great early summer
1:29.2	check-in on the macro, so I hope you enjoy it. All right, Lynn, welcome back to the breakdowns.
1:35.3	It's great to have you back. Thanks for having me back. So we were just talking about this a little
1:40.1	bit. What I really want to do on today's show is just check in with you on a number of
1:45.9	the different things going on right now. I think there's a kind of a broad sense of shifting
1:51.3	between phases or cycles, certainly within the Bitcoin market, but also just, I think that
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