Cathie Wood LATEST UPDATE On Bitcoin And Other Markets

Cathie Wood LATEST UPDATE On Bitcoin And Other Markets

Cathie Wood Updates on Bitcoin and Other Markets

In this video, Cathie Wood compares Decentralized Finance (DeFi) with the traditional financial system with respect to the ability to withstand market shock. She also talks about the effects of government stimulus on the US dollar and the prices of goods. Here is the summary of the analyses:

On cryptocurrencies, deflation is the higher probability, and it's way out of consensus. In the past, the financial world nearly collapsed because of counterparty risk. But the crypto market has fallen from $2 trillion to $1 trillion in the last few months and the market is still stable. Meanwhile, if the equity and bond prices were cut in half in just a few months, the market would be in a counterparty problem, considering the high leverage.

The relative reliability of the DeFi system has prompted some central banks to adopt stablecoins and legitimize digital currencies. These moves are accelerating the movement of institutions and sovereigns to the Defi world.

Despite being cut in half, Bitcoin's price is still triple since last September. If the price rises, this indicates increased purchasing power - a deflationary factor.

In May, disposable personal income dropped 2% month to month again, mostly because of stimulus checks, causing the savings rate to drop to 12.4%, compared to the 8% pre-coronavirus rate.

In May, retail inventory fell 0.8%, after a drop of 1.6% in April while industrial production is going up. 0.8%. This shows inventory might be back in consumer homes.

US Bonds are offering at a lower rate of 1.4%, and this is above negative yields in Germany and Japan. The dollar is going up partly because the terms of trade won't turn against the United States in the form of higher corporate tax rates. The 15% minimum tax will hit everyone in the world disproportionately, especially tech companies.

We are now witnessing deflationary signals, indicating inventory corrections. For example, lumber prices are falling. In China, pork prices have dropped drastically. Copper prices are down by 10%. As for oil, OPEC has not agreed. But the higher the oil price goes the more demand destruction it will be because there will be a bigger incentive to buy electricity.
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