The four horsemen of the apocalypse are riding roughshod over Bitcoin… and the no-coiners are cheering. I'll break down the FUD, separate facts from fiction, and explain what set all this off.
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- Japan's stock market, the Nikkei 225, is currently set to post its largest 2-day drop in history.
- The Bank of Japan (BoJ) is caught between tightening monetary policies, risking a collapse of the carry trade, or maintaining low rates, which threatens financial stability.
- Magnificent Seven set to shed $1 trillion in value, led by Apple, Nvidia
- Treasuries Surge as Traders Bet on Emergency Fed Rate Cut
- Schwab, Fidelity resolve temporary disruptions on frenetic trading day
- Are Banks Sweeping Dud Property Loans Under the Rug? - WSJ
- Biden's Treasury accused of trying to juice U.S. economy pre-election
- Schwab, Fidelity resolve temporary disruptions on frenetic trading day
- The Japanese Yen has retraced an entire year's worth of price action in just 26 days.
- Dow tumbles 1,000 points, S&P 500 posts worst day since 2022
- Wharton's Jeremy Siegel says Fed needs to make an emergency rate cut
- Carry trades: A major unwinding is underway amid a stock sell-off
- The Reason Behind Bitcoin's Price Crash: Arthur Hayes Speculates
- Bitcoin Crash Wipes Out 18% Of Profitable Investors In 24 Hours - BitcoinWorld
- Bitcoin Falls Below $53K, Wiping Out $600M in Leveraged Longs - Co…
- Saylor's $2 Billion Bitcoin Plan Amid Market Chaos
- Polymarket 26% chance of U.S. Recession in 2024
- Tezos co-founder calls Bitcoin “pretend internet money” on CNBC
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And something is wrong. Let's not forget, when the Federal Reserve was created, we were promised no more boom and bust cycles, right? We had four panics in the 1800s that were devastating. We had the panic in the early 1900s. They said, that's it. We're going to create this central bank, and we're going to 1913, and we're going to never have panics again. We're never going to have crazy business cycles. That's all we've had since then. That's true. Maybe it's a time to make some adjustments. Music. We'll be right back. Welcome in to This Week in Bitcoin, episode 22. My name is Chris. It's a special report.
There is a lot going on today. Really, four major events came together to create just a hell of a day in the market, and Bitcoin's taken a beating. I want to explain what's going on, why it's impacting Bitcoin, how it's impacting Bitcoin, and maybe roughly guess for how long. Then I think we'll take just a couple of moments to respond to some of the no-coiners. That are just coming out of the woodwork to really just dunk on Bitcoin as the market is in pure reaction mode. Talk about opportunist. Because anyone watching Bitcoin over this weekend, it's Mondays I record, Monday the 5th of August, 2024.
Anyone that was watching Bitcoin saw the writing on the wall. I mean, I was telling the family, like, brace yourselves. Monday morning is going to be a bloodbath in the market. it. We're following the breaking news out of Wall Street. The Dow, look at this, down 950. Right now, 958. As a global market sell-off intensifies, Friday's disappointing July jobs report showed that the unemployment rate was at a three-year high, 4.3%. That produced whispers of a potential recession, growing concerns about the strength of the U.S. economy. The Japanese markets dropped more than 4,400 points. That's their sharpest since the Black Monday crash of 87.
Adding to the downturn are investor concerns that the Federal Reserve waited too long to begin cutting interest rates. So there's really... Four horsemen of the market apocalypse that she just touched on. I mean, she just banged through them. Weak jobs report suggesting economic slowdown and that jobs may be about to fall off a cliff. Number two would be speculation that the Fed waited too long, sort of a knock-on effect of the weak jobs. Number three, Middle East conflicts are accelerating in a very dangerous way. Number four, the yen carry trade collapse has really just begun.
And I'll add a fifth in here. A fifth horseman, I guess. The market's just been going up for a long time, guys. Like it was sort of hot and ready for a correction. And this yen carry trade collapsing is maybe the perfect opportunity for this correction. And I think it means things are going to be dicey for a while while the market prices all of this in. But let's talk a little bit about this because it has been all of this coming together created kind of a historical market day. History in the making. What some would call history in the making.
Don't say that. We have never been down 1,000 points ever, not even intraday on the NASDAQ. Is that true? That is true. Okay. I'm down 6% right from the get-go. This is heavy, heavy. Big tech. Here we go. Look at them go down. Microsoft is down 20 bucks. That's 5%. Alphabet, 5%. Meta, 6%. Amazon, 6%. Apple, 9% down. Let's pull out Apple. This is interesting. Interesting. Oh, Jan, yeah, if you've been in Bitcoin for a while, 6% declines, that's just a Monday. That's no big deal at all. But this yen carry trade is really something that I started talking about a few weeks ago or a few episodes ago on the show.
And it was a sweet deal for risky traders. This clip will kind of explain the dynamics that were at play. At least. The Japanese stock market benefited tremendously from the persistent weakness in the yen. Remember, they've essentially had stagflation since the mid-90s over in Japan. Finally, the central organizers were able to kind of stoke inflation. Yes, they were trying to actually stoke inflation. The problem is, is once it gets rolling, they have to start raising rates. Now, there are other positives that the Japanese economy has been going through, particularly corporate Japan in terms of corporate governance, returns on equity, unwinding share cross holdings and so on.
So there was a fundamental story to Japan. But I think what this is reflecting in is how much money people borrowed in yen to buy Japanese stocks, among many other assets that are now unwinding. And this goes back to their rate hike last Wednesday, the same day the Fed was holding rates steady here. The Bank of Japan decided to hike rates. It wasn't exactly their first rate hike, but it was one of just a couple since, what, March or so? Why did that so quickly kind of push things to the other side of the card? Well, it's sort of revealing itself. The Fed That started raising rates in March 2022.
It took the BOJ two years later just to get them out of negative interest rates. BOJ being the Bank of Japan. You think they should have gone sooner? They should have gone sooner when inflation was persistently above 2%. Now, one of the things that I don't think he's clearly saying, so I want to make sure it's clear to you, is that people were borrowing in yen, traders were borrowing in yen, because the interest rates were low. He says it in here. It was one of the last sources of cheap or free money. So they'd get a loan, I should say, in yen. Then they would move that around either in the Japanese stock market or in the U.S. stock market. And they'd buy tech, maybe with leverage.
So maybe they'd come with $1,000 of yen collateral into the stock market. And then they'd buy on margin. margin so they put maybe they'd buy two thousand dollars worth of nvidia with one thousand dollars of yen collateral now if nvidia goes down like it has they get margin called but the problem is if the interest rate in japan goes up then they get less for their yen now their yen that they was worth a thousand dollars is only worth eight hundred dollars. And so they're getting margin called on their $2,000 margin loan for their NVIDIA stock. And their collateral is only worth $800.
So it's, and then of course, the banks in Japan say, hey, wait a minute here. You need to actually pay up on your loan to us. And they margin call the loan in yen. It's a house of cards because essentially the traders were looking for a source of cheap liquidity. And since the US rate was going up, the interest rate was going up, the cost to borrow in the United States went up. And so they looked somewhere else and they found Japan. And Japan was keeping the rates low. And so all these traders took out loans in cheap Japan money, the yen.
And they started buying up Nvidia and maybe Bitcoin ETFs and Apple stock and super micro Microstock and all these tech stocks that were pumping. They were buying them on margin too. So he's not quite explaining that dynamic, but that's why it matters so much that the Bank of Japan just started raising rates right as the Fed at the last FOMC meeting decided not to raise rates. It took the BOJ two years later just to get them out of negative interest rates. Do you think they should have gone sooner? They should have gone sooner when inflation was persistently above 2%. But by waiting, every month that went by, more borrowing was taking place in yen.
It was the last place in the world to sort of get free money. And that free money, we couldn't necessarily quantify, but we're seeing sort of the result of the unwind now to say, wow, that was massive. We didn't really see it while it was going on to the extent that it's revealed itself to be, but it was obviously massive. History teaches us, too. It's funny how it's always something we can't quite see. Something a little different, something a little more opaque. Oh, we didn't quite see that. And, well, there you go. So that's the yen carry trade that you're hearing everybody talk about that's collapsing at this moment because it's not such a good source of cheap money anymore.
Now, in a month or so, probably two, three, whatever, by October, those situations are going to probably start changing here in the States. I would imagine something like this doesn't unwind over one week or over one market day. This is something that unwinds over years, this yen carry trade, years. So I don't think this is going to be ultimately what permanently drags down the U.S. market. Most of the knockout effects will happen immediately here in the U.S., but the longer tail is going to be in Japan. And I don't think it will have as direct impact on the U.S.
Market after some time passes. But whenever this happens, whenever everything dumps, everything collapses, it always brings up the conversation of, well, what about Bitcoin? Why is all of this impacting Bitcoin? Why are these four horsemen that are attacking the macro economy impacting Bitcoin? Isn't it supposed to be its own thing? It's on its own network. It's not managed. You know, it's not pumped by the Fed. So why is Bitcoin dumping? Why isn't it a store of value? Bitcoin, what is Bitcoin? This is Joe on CNBC. Tom Lee's there. And of course, Aaron Sorkin is also at the desk. This is Tom Lee. He's a good investor. I think he's a good analyst.
And he has to acknowledge the fact that most of the market right now does trade Bitcoin as a risk asset. Or another way you could put that as a tech stock. Most of the day traders that are trading Bitcoin, they're not using it for any kind of long-term hedge. They don't understand the monetary properties of it. They just see it as kind of like a tech stock, like an Apple or an Nvidia stock. And, you know, there's potentially been lots of liquidations. I think several hundred thousand accounts liquidated over the weekend. To get money, to get money. Yeah, margin calls.
So what does that say to you, though, longer term about Bitcoin? Does it say anything to you? I think it's showing you that as it becomes more widely held and held in traditional brokerage accounts, it is going to be increasingly a risk on assets. We shouldn't think of it as gold then, a digital gold. We shouldn't think of it as a store of value per se. Aaron Sorkin going right for this favorite old horse of his that he loves to beat. This is a top issue for Aaron. He always, whenever Bitcoin's down, he loves to point out on TV that Bitcoin's down and it's not a store of value. Clearly, this must demonstrate it's not a store of value. Obviously, it's not a store of value.
Because it's down today. We shouldn't think of it as gold, then, a digital gold. We shouldn't think of it as a store of value per se. We should think of it as something else, a speculative tool that's in this sort of NASDAQ-y camp. It's kind of both. I mean, it's kind of, it's very unique. How can it be both? When people say both, I don't get that both part. I sort of agree. Until it, I mean, it obviously has, some people think it has value, But when you need it and you need to turn some of that value into cash for margin calls, you're going to you're going to sell it if it's up.
Yeah. So when would then it be a store of value? That's obviously it's a store of value when it's in the speculative and it goes up camp. It's not a store of value. Well, it's still storing fifty two thousand dollars worth of value versus eight thousand dollars worth of value. I agree. I'm just saying most people. What's incredible about Sorkin is what Sorkin doesn't understand. And I just, it blows me away, is then in the next segment, he'll talk about the NASDAQ 200-day moving average price and he'll completely ignore the today price, which is down, and he'll talk about the 200-day moving average price of another, like the NASDAQ, like in just the next segment.
How he doesn't apply the same thinking to both is bonkers. When he says in here, well, it's not a long-term store of value because it's down right now, that really kind of betrays the way he's thinking about it. We'll play through some of this again and we'll break it down. I think it's showing you that But as it becomes more widely held and held in traditional brokerage accounts, it is going to be increasingly a risk on assets. We shouldn't think of it as gold then, a digital gold. We shouldn't think of it as a store of value per se.
We should think of it as something else, a speculative tool that's in this sort of NASDAQ-y camp. It's kind of both. I mean, it's kind of, it's very unique. How can it be both? When people say both, I don't get that both part. How can he not understand? I mean, I could understand an average person not getting it, but he sits at the desk for Squawk Box on CNBC and he covers this and he has Larry Fink sit down and he has Michael Saylor and he has all these different people explain it to him over and over again. And the moron still doesn't get it. It's really simple Aaron.
It's really really simple It goes up on the long term if you hold it for four to five years Nobody has ever lost money in the history of Bitcoin in 15 years No one has ever lost money if they hold the asset for four or five years It's a store of value. You could buy it at $28 hold it for five years and sell it for $35,000 just to you know. Or today, you could buy it at $60,000 and hold it, and it'll probably be worth $150,000 or whatever it's going to be in five years. Over the long term, if you look at the 200-day moving average, which, by the way, all these companies like MicroStrategy and all the ETFs that are looking at their cost basis for Bitcoin acquisition, they all use the 200-day moving average price because they're serious about this. They're not looking at the one-minute chart.
No serious investor is living and dying by the one minute chart. And that is basics. That's one-on-one. That's not unique to Bitcoin. That's everything. And I can't believe Sorkin doesn't understand that. He really can't wrap his head around it because he doesn't want to. And what Aaron fails to mention while he's dunking on Bitcoin right then when it's on a down day is at that moment, and I believe as I still record, six of the major trading platforms forums are down, including Citi, Fidelity, E-Trade, Vanguard, TD Ameritrade, and Charles Schwab. They all crashed.
They all went down. So none of the retail could get out. Bitcoin was up 24-7, seven days a week. You can sell millions of dollars of Bitcoin from your phone in two minutes, 24-7. Nothing, nothing is as liquid and as available as Bitcoin. It has the market size. it has a trillion dollar market cap it has buyers and sellers 24 7 you can do it with a range of options and companies and directly on your phone and it also means and this i don't know why people haven't wrapped their head around this yet it means bitcoin is always going to be the first to price in major problems if you've got a trader who's sitting there friday night saturday morning sunday afternoon and they're panicked about world war three or they know that it's going to be a bloodbath on Monday and they need some cash.
They can't sell stock. They can't sell gold. They can't sell their house. They can't sell anything. They can't go to the bank. They can't get it out of their bank account. But they can sell Bitcoin in two minutes on their phone. So it's always going to be the first to price it in at every level, from retail all the way up to the professional traders. Bitcoin is the canary in the coal mine because it is the only remaining free market with actual liquidity and a wide network and distribution. And so instead of mocking Bitcoin, people should be watching Bitcoin to try to understand where this is going.
But you can't just do that. You have to debase yourself. And we're going to keep the receipts here on the show. I'm going to keep these clips. And we're going to play these clips again. This is Kramer dunking on Bitcoin this morning. And it's just, you know, he's all crypto is great. Larry Fink's a genius when the number go up. And then as soon as the number go down. Bitcoin was supposed to be a store of value. Thank you. Yeah. Would we be safe in Bitcoin? Would have been the thought that perhaps John Book. That is not that is not the case. Well, it just turns out that gold.
Yeah, gold. In fact, it's all about gold. You see, gold is the better play, according to Jim Cramer. He was talking to like an oil driller in Canada. And he that guy was really bearish on crypto. I'm not kidding you. This is literally the conversation they had on air. Two other hosts on CNBC who don't get it. And, you know, so obviously gold's the way to go. Why? Why does Jim Cramer say gold's the way to go? Because gold is scarce. When things go bad, crypto will go bad with it, but gold won't because we've only found about 1% more gold each year. There's just not a lot of gold to be found.
I love that. I love this. I thinking, right? Gold's scarce, so it makes it better than Bitcoin, which has 21 million coins hard capped. Thank you. Like, wow. Okay. Okay, Jim. That's some great logic there. And then maybe Bitcoin dumps harder when there's a market crisis because Bitcoin is liquid. And gold, how are you going to get your gold? And what happens if you get a paper run on gold? How are they going to fulfill that? People can't take a million dollars or in this case, a trillion dollars has been removed from the crypto market. Yeah. You can't you can't take out nearly a trillion dollars in gold without causing massive havoc because they can't get you that gold that fast.
Right. What are you going to go to give it to somebody else? They're going to give you cash. Like, what's the process here? It's the idea that the velocity somehow equates to the quality is silly because you could apply the same logic reverse to gold. But, you know, because gold's scarce, it's better than Bitcoin. And with it, but gold won't because we've only found about one percent more gold each year. There's just not a lot of gold to be found. And that's not managed by just a handful of big companies that are very intentionally trickling gold onto the market to maintain prices at a certain level.
That's clearly not that. And a lot of it's in high-cost places. So gold is maintaining its value. And I think that's great. And I think everyone should have 10% of their assets in gold if they can get it. And try getting that out of Costco. It's, like, really hard. Yeah, but by the way, it's hard to get the gold. And it's hard to get rid of your gold, too. So it's hard to get the gold. It's hard to get rid of your gold. But you should have 10% of your assets in it. So that way you can't even beat inflation. I mean, I'm not a gold hater, but I'm living in Washington state where like my cost of living is up over 20% year over year.
This is ridiculous things. It's like the things here, the food alone has got to be up like 60% for some of the things we buy for our family. Gas prices have doubled. Gas is still $4 over four, almost, almost $6 a gallon at some places when you go downtown. And he's telling me that I should save my life energy in gold, which is like going up a tiny percent. It's ridiculous. Just because it doesn't crash today when everything else crashes. This is the difference between a beta trader and somebody who is building lifetime wealth. You have to remain rational.
You have to keep focused on the fundamentals. It's crucial for navigating volatile markets like we see today. And I have a question for you. So, Booston. Do you agree with me here? Let me know your thoughts on this kind of like coming out of the woodwork to bash on Bitcoin. And also, if you get values from this type of specific episode, if you like these focused episodes, let me know. Boost in. Tell me what you think about it. But one more clip that I want to play for you. This one, this one's really good. This is the Tezos co-founder. Now, Tezos is a blockchain technology company with their own ship coin.
And she comes on CNBC and she uses this opportunity today to dunk on Bitcoin. No, I think I think basically what we're seeing is something similar to what happened at the beginning of COVID, where folks get a sense of something that looks like a recession. And the first thing they decide to sell is their pretend Internet money. But yeah, the news coming out of Japan obviously correlates with quite a bit of that. Pretend internet money. And you can guarantee on CNBC, Aaron Sorkin, he's going to be all over some Bitcoin hate. So it's nothing different than margin calls. And if you have stocks or Bitcoin or any assets that are sellable, you can take profits and maybe cover what you need to cover elsewhere.
Nothing further than that. I mean, gold didn't go down. No, I think Bitcoin, it's a bit of a shellacking because it's definitely cast more as a speculative currency. It's not treated the same as a lot of other equities. You just called a pretend internet money. Yes. You're saying the quiet part out loud for some people. He was just waiting for that moment. She runs a competing blockchain. The bias, it's obvious. She should come out there with locos on her shirt. And she sits there the whole time with her mouth hanging open, by the way. That's the quality of guest here.
The fact that people can sell off their Bitcoin fast and get cash in the moment of some sort of economic uncertainty is a feature, not a bug. Nobody can say no. Nobody can stop you. No trading platform goes down, Bitcoin remains up. No circuit breaker breaks. No company tells you no. No Robin Hood cutting you off. You get access to your money. And then you can save your money in small fractions as you can afford. Man, things are tight in my household. I don't have very much money to buy gold or stocks, especially when I never know if the stocks are actually going to go up or down.
And if they do go up, maybe I get 8%, 10% return. Whoop-dee-doo. Again, doesn't even cover the debasement of my fiat. But I can buy Bitcoin one sat at a time with something like Strike. You know, when it was on a time like this, when the price is down, when Bitcoin's on sale, I'll pick up a couple million sats. I can pick up a couple million sats. And I can store that and I can sit on that for five years. And it'll be worth substantially more. And I can do it incrementally as my budget allows for. And none of these analysts, because they're all rich, they're all privileged, they don't seem to understand what the situation is for everyday people out there. Nearly one-third of parents say they cannot afford back-to-school shopping for their kids this year.
A new study conducted on behalf of Credit Karma shows 50% of parents plan to sacrifice necessities in order to get enough school supplies. That includes sacrificing groceries and paying bills. So parents are going to sacrifice food and paying the bills, like, you know, the lights. A national report finds families are now spending an average of $874 just on school supplies and electronics. United States of America, everybody. And they're dunking on Bitcoin because the people can get money out when they need it fast. Do you understand how sick and twisted that is? It's swisted.
It's what it is. The Bitcoin haters are swisted. They're really swisted. And I think they're going to look silly. I think just maybe not in a week, maybe not a couple of weeks. Maybe it's going to take till October. I don't know who does. Nobody could. But in not so long, they're going to look silly. Things will turn around. I want to recap the state of Bitcoin. But before we get there, I have to point out the obvious elephant in the room. This is not a political show, but there's an election at stake here. All that, ladies and gentlemen, and everyone else, that is called Bidenomics.
That is called Bidenomics, and we are very proud of Bidenomics. So, you know, you can't have all this going down right 90 days before an election. Like, they're going to have to try to do something, and it's going to get political. And the longer it's painful, the worse it's going to be for the incumbent, well, or for the VP. But let's recap Bitcoin, because just despite the fact that there's this political element, and when you review the Fed's decisions, depending on how you measure it, it looks like they're pretty political sometimes, especially during election years. In fact, if you look historically at Bitcoin's price, you can see political interactions every election cycle that, you know, happens on a four-year cadence just like the halving does.
But this year is different. Spot ETFs launched and Larry Fink is mega bullish. And these ETF firms are incentivized for the ETF number to go up. They don't benefit from the ETF number going down. And these are massively powerful institutions. Two different presidential candidates in the United States spoke at the Bitcoin conference saying that they would implement strategic reserves in the US of A. That idea is out there now. One of the largest wealth advisors, Morgan Stanley, just approved their financial advisors to market the Bitcoin ETFs to their high net worth clients.
Others will absolutely follow suit. This is a massive deal. Cantor Fitzgerald says they own a shipload of Bitcoin. I don't think you can understand how big it is that Cantor Fitzgerald is out there saying that. VanEck's CEO is also out there saying he has 30% of his personal funds in Bitcoin. That's VanEck's CEO. 30% of his personal funds are in Bitcoin. Selmer Scientific announced a Bitcoin treasury and submits an S3 for $200 million in funding to buy more Bitcoin. Saylor over at MicroStrategy has submitted for a $2 billion ATM to buy Bitcoin. Reports have it that Jamie Dimon has changed his tune on Bitcoin after being a staunch detractor for years.
The Mt. Gox distribution, just about over. El Salvador continues, even today, to buy one Bitcoin every single day. Banks are still working to custody Bitcoin for massive clients. Fiat currencies are continuing to be debased. M2 supply just hit an all-time high while all this is going down. And the DCA crowd out there is still stacking every day, reducing the number of Bitcoin available for purchase. And in the face of massive recession fears, Bitcoin's price is basically, as I record right now, back to where it was in July. Maybe we'll slide back to May. Bitcoin has been more and more resilient in the face of macro panic than I have ever witnessed it.
And even though it's being used more and more frequently as a source of quick liquidity, it's still holding up. I mean, you guys have to understand that when we are seeing this, the four horsemen of an economic apocalypse like this, even just as as as just as recently as covid, the start of covid lockdowns, bitcoin tank down to like eight thousand dollars and we're hanging out in the 50s right now. You know, you got to be kidding me. That's massively bullish. That's massive. That means collectively we've repriced Bitcoin. And even if it continues to slide, the fact that it's holding on and hanging to these levels means as a community, we have repriced what expensive and cheap Bitcoin is in our head.
And to us now, 50,000 seems cheap. That's a remarkable land shift for all of us to have taken. So my word is, my advice I should say is don't panic, but be prepared. There could be more to come for a bit. we're going to be in this unknown phase for a little while. And I think it's pretty common to see a big dip before a rate cut as well. So there was some school of thought that this was coming if we were going to get a rate cut. And now the conversation around rate cuts has absolutely shifted to win rate cuts. It's a foregone conclusion now.
And when that happens, you're going to see Bitcoin pump again. And there are years where all of Bitcoin's price action happens in just 10 days of the year. That's happened before where Bitcoin is just sideways, it crab walks, it steps down for a while, and then it rips for 10 days and reaches all time new highs. And then it fights around that new level for a while. It's pretty common. This could be a historically great buying opportunity. It's a great time to implement DCA, daily cash average. Don't go all in on one particular price point because could slide for a bit, could also rip. You just don't know when things are this volatile.
So if you DCA and you purchase a little bit at a time, you can be purchasing into the dip or into the pump, and you're not going all in on one particular price level. It's all about staying rational. It's all about recognizing that this happened before and it will happen again. In fact, this is my last clip of the episode. This is a fantastic clip of Peter Lynch talking about pullbacks in the stock market back when I was like a kid. But you should study history, and history is the important thing you learn from. What you learn from history is the market goes down.
It goes down a lot. The math is simple. There's been 93 years this century. This is easy to do. The market's had 50 declines of 10% or more. So 50 declines in 93 years. About once every two years, the market falls 10%. We call that a correction. That means that's a euphemism for losing a lot of money rapidly. But we call it a correction. So 50 declines in 93 years. About once every two years, the market falls 10%. Of those 50 declines, 15 have been 25% or more. That's known as a bear market. We've had 15 the clients in 93 years so every six years the markets gonna have a 25% decline that's all you need to know you need to know the markets gonna go down sometime if you're not ready for that you shouldn't own stocks and it's good when it happens if you like a stock at 14 it goes to six that's great you understand the company you look at the balance sheet they're doing fine and you're hoping to get to 22 with it 14 to 22 is terrific 6 to 22 is exceptional so So you take advantage of these declines.
They're going to happen. No one knows when they're going to happen. People tell you about it after the fact that they predicted it, but they predicted it 53 times. So you can take advantage of the volatility in the market if you understand what you own. So I think that's the key element. Another key element is that you have plenty of time. People are in an unbelievable rush to buy a stock. I'll give you an example of a well-known company. Walmart went public in October of 1970. In 1970 it went public. Already had a great record. It had 15 years performance, great balance sheet. You could have waited 10 years saying you're a very conservative investor.
You're not sure this Walmart can make it. You want to check. You see them operate in small towns. You're afraid they can only make it in seven or eight states. You want to wait until they go to more states. You keep waiting. You could have bought Walmart 10 years after it went public and made 35 times your money. If you bought it when they went public, you would have made 500 times your money. But you can wait 10 years after Walmart went public and made over 30 times your money. There you have it. Peter Lynch from 1994. I will wrap it up right there. Thank you so much for joining me.
Please do boost in if you found this valuable. My node now actually should be sorted. I think I had some channel issues that I didn't realize in the last episode. So some of you tried to boost and it failed. But it should be working now. And I'd appreciate a little bit of help testing it if you'd like to send a boost in. Links to what I talked about today are at thisweekinbitcoin.show. And I'm going to leave you with a song that really spanks. So you've been warned. You've been warned. This is Jim Cramer pumps CrowdStrike and dumps Bitcoin by Anonymous. Bitcoin is about to go down big. And I would sell my Bitcoin right into this rally.
And believe me, I had been a believer one time in Bitcoin. Not here, not now. One company that seems to be immune because it's now the king of cyber, which is CrowdStrike. Now they report June 4th. This company has yet to miss a quarter since it came public. That's the last remaining domino, and I don't think that domino is going to... Music.
And something is wrong. Let's not forget, when the Federal Reserve was created, we were promised no more boom and bust cycles, right? We had four panics in the 1800s that were devastating. We had the panic in the early 1900s. They said, that's it. We're going to create this central bank, and we're going to 1913, and we're going to never have panics again. We're never going to have crazy business cycles. That's all we've had since then. That's true. Maybe it's a time to make some adjustments. Music. We'll be right back. Welcome in to This Week in Bitcoin, episode 22. My name is Chris. It's a special report.
There is a lot going on today. Really, four major events came together to create just a hell of a day in the market, and Bitcoin's taken a beating. I want to explain what's going on, why it's impacting Bitcoin, how it's impacting Bitcoin, and maybe roughly guess for how long. Then I think we'll take just a couple of moments to respond to some of the no-coiners. That are just coming out of the woodwork to really just dunk on Bitcoin as the market is in pure reaction mode. Talk about opportunist. Because anyone watching Bitcoin over this weekend, it's Mondays I record, Monday the 5th of August, 2024.
Anyone that was watching Bitcoin saw the writing on the wall. I mean, I was telling the family, like, brace yourselves. Monday morning is going to be a bloodbath in the market. it. We're following the breaking news out of Wall Street. The Dow, look at this, down 950. Right now, 958. As a global market sell-off intensifies, Friday's disappointing July jobs report showed that the unemployment rate was at a three-year high, 4.3%. That produced whispers of a potential recession, growing concerns about the strength of the U.S. economy. The Japanese markets dropped more than 4,400 points. That's their sharpest since the Black Monday crash of 87.
Adding to the downturn are investor concerns that the Federal Reserve waited too long to begin cutting interest rates. So there's really... Four horsemen of the market apocalypse that she just touched on. I mean, she just banged through them. Weak jobs report suggesting economic slowdown and that jobs may be about to fall off a cliff. Number two would be speculation that the Fed waited too long, sort of a knock-on effect of the weak jobs. Number three, Middle East conflicts are accelerating in a very dangerous way. Number four, the yen carry trade collapse has really just begun.
And I'll add a fifth in here. A fifth horseman, I guess. The market's just been going up for a long time, guys. Like it was sort of hot and ready for a correction. And this yen carry trade collapsing is maybe the perfect opportunity for this correction. And I think it means things are going to be dicey for a while while the market prices all of this in. But let's talk a little bit about this because it has been all of this coming together created kind of a historical market day. History in the making. What some would call history in the making.
Don't say that. We have never been down 1,000 points ever, not even intraday on the NASDAQ. Is that true? That is true. Okay. I'm down 6% right from the get-go. This is heavy, heavy. Big tech. Here we go. Look at them go down. Microsoft is down 20 bucks. That's 5%. Alphabet, 5%. Meta, 6%. Amazon, 6%. Apple, 9% down. Let's pull out Apple. This is interesting. Interesting. Oh, Jan, yeah, if you've been in Bitcoin for a while, 6% declines, that's just a Monday. That's no big deal at all. But this yen carry trade is really something that I started talking about a few weeks ago or a few episodes ago on the show.
And it was a sweet deal for risky traders. This clip will kind of explain the dynamics that were at play. At least. The Japanese stock market benefited tremendously from the persistent weakness in the yen. Remember, they've essentially had stagflation since the mid-90s over in Japan. Finally, the central organizers were able to kind of stoke inflation. Yes, they were trying to actually stoke inflation. The problem is, is once it gets rolling, they have to start raising rates. Now, there are other positives that the Japanese economy has been going through, particularly corporate Japan in terms of corporate governance, returns on equity, unwinding share cross holdings and so on.
So there was a fundamental story to Japan. But I think what this is reflecting in is how much money people borrowed in yen to buy Japanese stocks, among many other assets that are now unwinding. And this goes back to their rate hike last Wednesday, the same day the Fed was holding rates steady here. The Bank of Japan decided to hike rates. It wasn't exactly their first rate hike, but it was one of just a couple since, what, March or so? Why did that so quickly kind of push things to the other side of the card? Well, it's sort of revealing itself. The Fed That started raising rates in March 2022.
It took the BOJ two years later just to get them out of negative interest rates. BOJ being the Bank of Japan. You think they should have gone sooner? They should have gone sooner when inflation was persistently above 2%. Now, one of the things that I don't think he's clearly saying, so I want to make sure it's clear to you, is that people were borrowing in yen, traders were borrowing in yen, because the interest rates were low. He says it in here. It was one of the last sources of cheap or free money. So they'd get a loan, I should say, in yen. Then they would move that around either in the Japanese stock market or in the U.S. stock market. And they'd buy tech, maybe with leverage.
So maybe they'd come with $1,000 of yen collateral into the stock market. And then they'd buy on margin. margin so they put maybe they'd buy two thousand dollars worth of nvidia with one thousand dollars of yen collateral now if nvidia goes down like it has they get margin called but the problem is if the interest rate in japan goes up then they get less for their yen now their yen that they was worth a thousand dollars is only worth eight hundred dollars. And so they're getting margin called on their $2,000 margin loan for their NVIDIA stock. And their collateral is only worth $800.
So it's, and then of course, the banks in Japan say, hey, wait a minute here. You need to actually pay up on your loan to us. And they margin call the loan in yen. It's a house of cards because essentially the traders were looking for a source of cheap liquidity. And since the US rate was going up, the interest rate was going up, the cost to borrow in the United States went up. And so they looked somewhere else and they found Japan. And Japan was keeping the rates low. And so all these traders took out loans in cheap Japan money, the yen.
And they started buying up Nvidia and maybe Bitcoin ETFs and Apple stock and super micro Microstock and all these tech stocks that were pumping. They were buying them on margin too. So he's not quite explaining that dynamic, but that's why it matters so much that the Bank of Japan just started raising rates right as the Fed at the last FOMC meeting decided not to raise rates. It took the BOJ two years later just to get them out of negative interest rates. Do you think they should have gone sooner? They should have gone sooner when inflation was persistently above 2%. But by waiting, every month that went by, more borrowing was taking place in yen.
It was the last place in the world to sort of get free money. And that free money, we couldn't necessarily quantify, but we're seeing sort of the result of the unwind now to say, wow, that was massive. We didn't really see it while it was going on to the extent that it's revealed itself to be, but it was obviously massive. History teaches us, too. It's funny how it's always something we can't quite see. Something a little different, something a little more opaque. Oh, we didn't quite see that. And, well, there you go. So that's the yen carry trade that you're hearing everybody talk about that's collapsing at this moment because it's not such a good source of cheap money anymore.
Now, in a month or so, probably two, three, whatever, by October, those situations are going to probably start changing here in the States. I would imagine something like this doesn't unwind over one week or over one market day. This is something that unwinds over years, this yen carry trade, years. So I don't think this is going to be ultimately what permanently drags down the U.S. market. Most of the knockout effects will happen immediately here in the U.S., but the longer tail is going to be in Japan. And I don't think it will have as direct impact on the U.S.
Market after some time passes. But whenever this happens, whenever everything dumps, everything collapses, it always brings up the conversation of, well, what about Bitcoin? Why is all of this impacting Bitcoin? Why are these four horsemen that are attacking the macro economy impacting Bitcoin? Isn't it supposed to be its own thing? It's on its own network. It's not managed. You know, it's not pumped by the Fed. So why is Bitcoin dumping? Why isn't it a store of value? Bitcoin, what is Bitcoin? This is Joe on CNBC. Tom Lee's there. And of course, Aaron Sorkin is also at the desk. This is Tom Lee. He's a good investor. I think he's a good analyst.
And he has to acknowledge the fact that most of the market right now does trade Bitcoin as a risk asset. Or another way you could put that as a tech stock. Most of the day traders that are trading Bitcoin, they're not using it for any kind of long-term hedge. They don't understand the monetary properties of it. They just see it as kind of like a tech stock, like an Apple or an Nvidia stock. And, you know, there's potentially been lots of liquidations. I think several hundred thousand accounts liquidated over the weekend. To get money, to get money. Yeah, margin calls.
So what does that say to you, though, longer term about Bitcoin? Does it say anything to you? I think it's showing you that as it becomes more widely held and held in traditional brokerage accounts, it is going to be increasingly a risk on assets. We shouldn't think of it as gold then, a digital gold. We shouldn't think of it as a store of value per se. Aaron Sorkin going right for this favorite old horse of his that he loves to beat. This is a top issue for Aaron. He always, whenever Bitcoin's down, he loves to point out on TV that Bitcoin's down and it's not a store of value. Clearly, this must demonstrate it's not a store of value. Obviously, it's not a store of value.
Because it's down today. We shouldn't think of it as gold, then, a digital gold. We shouldn't think of it as a store of value per se. We should think of it as something else, a speculative tool that's in this sort of NASDAQ-y camp. It's kind of both. I mean, it's kind of, it's very unique. How can it be both? When people say both, I don't get that both part. I sort of agree. Until it, I mean, it obviously has, some people think it has value, But when you need it and you need to turn some of that value into cash for margin calls, you're going to you're going to sell it if it's up.
Yeah. So when would then it be a store of value? That's obviously it's a store of value when it's in the speculative and it goes up camp. It's not a store of value. Well, it's still storing fifty two thousand dollars worth of value versus eight thousand dollars worth of value. I agree. I'm just saying most people. What's incredible about Sorkin is what Sorkin doesn't understand. And I just, it blows me away, is then in the next segment, he'll talk about the NASDAQ 200-day moving average price and he'll completely ignore the today price, which is down, and he'll talk about the 200-day moving average price of another, like the NASDAQ, like in just the next segment.
How he doesn't apply the same thinking to both is bonkers. When he says in here, well, it's not a long-term store of value because it's down right now, that really kind of betrays the way he's thinking about it. We'll play through some of this again and we'll break it down. I think it's showing you that But as it becomes more widely held and held in traditional brokerage accounts, it is going to be increasingly a risk on assets. We shouldn't think of it as gold then, a digital gold. We shouldn't think of it as a store of value per se.
We should think of it as something else, a speculative tool that's in this sort of NASDAQ-y camp. It's kind of both. I mean, it's kind of, it's very unique. How can it be both? When people say both, I don't get that both part. How can he not understand? I mean, I could understand an average person not getting it, but he sits at the desk for Squawk Box on CNBC and he covers this and he has Larry Fink sit down and he has Michael Saylor and he has all these different people explain it to him over and over again. And the moron still doesn't get it. It's really simple Aaron.
It's really really simple It goes up on the long term if you hold it for four to five years Nobody has ever lost money in the history of Bitcoin in 15 years No one has ever lost money if they hold the asset for four or five years It's a store of value. You could buy it at $28 hold it for five years and sell it for $35,000 just to you know. Or today, you could buy it at $60,000 and hold it, and it'll probably be worth $150,000 or whatever it's going to be in five years. Over the long term, if you look at the 200-day moving average, which, by the way, all these companies like MicroStrategy and all the ETFs that are looking at their cost basis for Bitcoin acquisition, they all use the 200-day moving average price because they're serious about this. They're not looking at the one-minute chart.
No serious investor is living and dying by the one minute chart. And that is basics. That's one-on-one. That's not unique to Bitcoin. That's everything. And I can't believe Sorkin doesn't understand that. He really can't wrap his head around it because he doesn't want to. And what Aaron fails to mention while he's dunking on Bitcoin right then when it's on a down day is at that moment, and I believe as I still record, six of the major trading platforms forums are down, including Citi, Fidelity, E-Trade, Vanguard, TD Ameritrade, and Charles Schwab. They all crashed.
They all went down. So none of the retail could get out. Bitcoin was up 24-7, seven days a week. You can sell millions of dollars of Bitcoin from your phone in two minutes, 24-7. Nothing, nothing is as liquid and as available as Bitcoin. It has the market size. it has a trillion dollar market cap it has buyers and sellers 24 7 you can do it with a range of options and companies and directly on your phone and it also means and this i don't know why people haven't wrapped their head around this yet it means bitcoin is always going to be the first to price in major problems if you've got a trader who's sitting there friday night saturday morning sunday afternoon and they're panicked about world war three or they know that it's going to be a bloodbath on Monday and they need some cash.
They can't sell stock. They can't sell gold. They can't sell their house. They can't sell anything. They can't go to the bank. They can't get it out of their bank account. But they can sell Bitcoin in two minutes on their phone. So it's always going to be the first to price it in at every level, from retail all the way up to the professional traders. Bitcoin is the canary in the coal mine because it is the only remaining free market with actual liquidity and a wide network and distribution. And so instead of mocking Bitcoin, people should be watching Bitcoin to try to understand where this is going.
But you can't just do that. You have to debase yourself. And we're going to keep the receipts here on the show. I'm going to keep these clips. And we're going to play these clips again. This is Kramer dunking on Bitcoin this morning. And it's just, you know, he's all crypto is great. Larry Fink's a genius when the number go up. And then as soon as the number go down. Bitcoin was supposed to be a store of value. Thank you. Yeah. Would we be safe in Bitcoin? Would have been the thought that perhaps John Book. That is not that is not the case. Well, it just turns out that gold.
Yeah, gold. In fact, it's all about gold. You see, gold is the better play, according to Jim Cramer. He was talking to like an oil driller in Canada. And he that guy was really bearish on crypto. I'm not kidding you. This is literally the conversation they had on air. Two other hosts on CNBC who don't get it. And, you know, so obviously gold's the way to go. Why? Why does Jim Cramer say gold's the way to go? Because gold is scarce. When things go bad, crypto will go bad with it, but gold won't because we've only found about 1% more gold each year. There's just not a lot of gold to be found.
I love that. I love this. I thinking, right? Gold's scarce, so it makes it better than Bitcoin, which has 21 million coins hard capped. Thank you. Like, wow. Okay. Okay, Jim. That's some great logic there. And then maybe Bitcoin dumps harder when there's a market crisis because Bitcoin is liquid. And gold, how are you going to get your gold? And what happens if you get a paper run on gold? How are they going to fulfill that? People can't take a million dollars or in this case, a trillion dollars has been removed from the crypto market. Yeah. You can't you can't take out nearly a trillion dollars in gold without causing massive havoc because they can't get you that gold that fast.
Right. What are you going to go to give it to somebody else? They're going to give you cash. Like, what's the process here? It's the idea that the velocity somehow equates to the quality is silly because you could apply the same logic reverse to gold. But, you know, because gold's scarce, it's better than Bitcoin. And with it, but gold won't because we've only found about one percent more gold each year. There's just not a lot of gold to be found. And that's not managed by just a handful of big companies that are very intentionally trickling gold onto the market to maintain prices at a certain level.
That's clearly not that. And a lot of it's in high-cost places. So gold is maintaining its value. And I think that's great. And I think everyone should have 10% of their assets in gold if they can get it. And try getting that out of Costco. It's, like, really hard. Yeah, but by the way, it's hard to get the gold. And it's hard to get rid of your gold, too. So it's hard to get the gold. It's hard to get rid of your gold. But you should have 10% of your assets in it. So that way you can't even beat inflation. I mean, I'm not a gold hater, but I'm living in Washington state where like my cost of living is up over 20% year over year.
This is ridiculous things. It's like the things here, the food alone has got to be up like 60% for some of the things we buy for our family. Gas prices have doubled. Gas is still $4 over four, almost, almost $6 a gallon at some places when you go downtown. And he's telling me that I should save my life energy in gold, which is like going up a tiny percent. It's ridiculous. Just because it doesn't crash today when everything else crashes. This is the difference between a beta trader and somebody who is building lifetime wealth. You have to remain rational.
You have to keep focused on the fundamentals. It's crucial for navigating volatile markets like we see today. And I have a question for you. So, Booston. Do you agree with me here? Let me know your thoughts on this kind of like coming out of the woodwork to bash on Bitcoin. And also, if you get values from this type of specific episode, if you like these focused episodes, let me know. Boost in. Tell me what you think about it. But one more clip that I want to play for you. This one, this one's really good. This is the Tezos co-founder. Now, Tezos is a blockchain technology company with their own ship coin.
And she comes on CNBC and she uses this opportunity today to dunk on Bitcoin. No, I think I think basically what we're seeing is something similar to what happened at the beginning of COVID, where folks get a sense of something that looks like a recession. And the first thing they decide to sell is their pretend Internet money. But yeah, the news coming out of Japan obviously correlates with quite a bit of that. Pretend internet money. And you can guarantee on CNBC, Aaron Sorkin, he's going to be all over some Bitcoin hate. So it's nothing different than margin calls. And if you have stocks or Bitcoin or any assets that are sellable, you can take profits and maybe cover what you need to cover elsewhere.
Nothing further than that. I mean, gold didn't go down. No, I think Bitcoin, it's a bit of a shellacking because it's definitely cast more as a speculative currency. It's not treated the same as a lot of other equities. You just called a pretend internet money. Yes. You're saying the quiet part out loud for some people. He was just waiting for that moment. She runs a competing blockchain. The bias, it's obvious. She should come out there with locos on her shirt. And she sits there the whole time with her mouth hanging open, by the way. That's the quality of guest here.
The fact that people can sell off their Bitcoin fast and get cash in the moment of some sort of economic uncertainty is a feature, not a bug. Nobody can say no. Nobody can stop you. No trading platform goes down, Bitcoin remains up. No circuit breaker breaks. No company tells you no. No Robin Hood cutting you off. You get access to your money. And then you can save your money in small fractions as you can afford. Man, things are tight in my household. I don't have very much money to buy gold or stocks, especially when I never know if the stocks are actually going to go up or down.
And if they do go up, maybe I get 8%, 10% return. Whoop-dee-doo. Again, doesn't even cover the debasement of my fiat. But I can buy Bitcoin one sat at a time with something like Strike. You know, when it was on a time like this, when the price is down, when Bitcoin's on sale, I'll pick up a couple million sats. I can pick up a couple million sats. And I can store that and I can sit on that for five years. And it'll be worth substantially more. And I can do it incrementally as my budget allows for. And none of these analysts, because they're all rich, they're all privileged, they don't seem to understand what the situation is for everyday people out there. Nearly one-third of parents say they cannot afford back-to-school shopping for their kids this year.
A new study conducted on behalf of Credit Karma shows 50% of parents plan to sacrifice necessities in order to get enough school supplies. That includes sacrificing groceries and paying bills. So parents are going to sacrifice food and paying the bills, like, you know, the lights. A national report finds families are now spending an average of $874 just on school supplies and electronics. United States of America, everybody. And they're dunking on Bitcoin because the people can get money out when they need it fast. Do you understand how sick and twisted that is? It's swisted.
It's what it is. The Bitcoin haters are swisted. They're really swisted. And I think they're going to look silly. I think just maybe not in a week, maybe not a couple of weeks. Maybe it's going to take till October. I don't know who does. Nobody could. But in not so long, they're going to look silly. Things will turn around. I want to recap the state of Bitcoin. But before we get there, I have to point out the obvious elephant in the room. This is not a political show, but there's an election at stake here. All that, ladies and gentlemen, and everyone else, that is called Bidenomics.
That is called Bidenomics, and we are very proud of Bidenomics. So, you know, you can't have all this going down right 90 days before an election. Like, they're going to have to try to do something, and it's going to get political. And the longer it's painful, the worse it's going to be for the incumbent, well, or for the VP. But let's recap Bitcoin, because just despite the fact that there's this political element, and when you review the Fed's decisions, depending on how you measure it, it looks like they're pretty political sometimes, especially during election years. In fact, if you look historically at Bitcoin's price, you can see political interactions every election cycle that, you know, happens on a four-year cadence just like the halving does.
But this year is different. Spot ETFs launched and Larry Fink is mega bullish. And these ETF firms are incentivized for the ETF number to go up. They don't benefit from the ETF number going down. And these are massively powerful institutions. Two different presidential candidates in the United States spoke at the Bitcoin conference saying that they would implement strategic reserves in the US of A. That idea is out there now. One of the largest wealth advisors, Morgan Stanley, just approved their financial advisors to market the Bitcoin ETFs to their high net worth clients.
Others will absolutely follow suit. This is a massive deal. Cantor Fitzgerald says they own a shipload of Bitcoin. I don't think you can understand how big it is that Cantor Fitzgerald is out there saying that. VanEck's CEO is also out there saying he has 30% of his personal funds in Bitcoin. That's VanEck's CEO. 30% of his personal funds are in Bitcoin. Selmer Scientific announced a Bitcoin treasury and submits an S3 for $200 million in funding to buy more Bitcoin. Saylor over at MicroStrategy has submitted for a $2 billion ATM to buy Bitcoin. Reports have it that Jamie Dimon has changed his tune on Bitcoin after being a staunch detractor for years.
The Mt. Gox distribution, just about over. El Salvador continues, even today, to buy one Bitcoin every single day. Banks are still working to custody Bitcoin for massive clients. Fiat currencies are continuing to be debased. M2 supply just hit an all-time high while all this is going down. And the DCA crowd out there is still stacking every day, reducing the number of Bitcoin available for purchase. And in the face of massive recession fears, Bitcoin's price is basically, as I record right now, back to where it was in July. Maybe we'll slide back to May. Bitcoin has been more and more resilient in the face of macro panic than I have ever witnessed it.
And even though it's being used more and more frequently as a source of quick liquidity, it's still holding up. I mean, you guys have to understand that when we are seeing this, the four horsemen of an economic apocalypse like this, even just as as as just as recently as covid, the start of covid lockdowns, bitcoin tank down to like eight thousand dollars and we're hanging out in the 50s right now. You know, you got to be kidding me. That's massively bullish. That's massive. That means collectively we've repriced Bitcoin. And even if it continues to slide, the fact that it's holding on and hanging to these levels means as a community, we have repriced what expensive and cheap Bitcoin is in our head.
And to us now, 50,000 seems cheap. That's a remarkable land shift for all of us to have taken. So my word is, my advice I should say is don't panic, but be prepared. There could be more to come for a bit. we're going to be in this unknown phase for a little while. And I think it's pretty common to see a big dip before a rate cut as well. So there was some school of thought that this was coming if we were going to get a rate cut. And now the conversation around rate cuts has absolutely shifted to win rate cuts. It's a foregone conclusion now.
And when that happens, you're going to see Bitcoin pump again. And there are years where all of Bitcoin's price action happens in just 10 days of the year. That's happened before where Bitcoin is just sideways, it crab walks, it steps down for a while, and then it rips for 10 days and reaches all time new highs. And then it fights around that new level for a while. It's pretty common. This could be a historically great buying opportunity. It's a great time to implement DCA, daily cash average. Don't go all in on one particular price point because could slide for a bit, could also rip. You just don't know when things are this volatile.
So if you DCA and you purchase a little bit at a time, you can be purchasing into the dip or into the pump, and you're not going all in on one particular price level. It's all about staying rational. It's all about recognizing that this happened before and it will happen again. In fact, this is my last clip of the episode. This is a fantastic clip of Peter Lynch talking about pullbacks in the stock market back when I was like a kid. But you should study history, and history is the important thing you learn from. What you learn from history is the market goes down.
It goes down a lot. The math is simple. There's been 93 years this century. This is easy to do. The market's had 50 declines of 10% or more. So 50 declines in 93 years. About once every two years, the market falls 10%. We call that a correction. That means that's a euphemism for losing a lot of money rapidly. But we call it a correction. So 50 declines in 93 years. About once every two years, the market falls 10%. Of those 50 declines, 15 have been 25% or more. That's known as a bear market. We've had 15 the clients in 93 years so every six years the markets gonna have a 25% decline that's all you need to know you need to know the markets gonna go down sometime if you're not ready for that you shouldn't own stocks and it's good when it happens if you like a stock at 14 it goes to six that's great you understand the company you look at the balance sheet they're doing fine and you're hoping to get to 22 with it 14 to 22 is terrific 6 to 22 is exceptional so So you take advantage of these declines.
They're going to happen. No one knows when they're going to happen. People tell you about it after the fact that they predicted it, but they predicted it 53 times. So you can take advantage of the volatility in the market if you understand what you own. So I think that's the key element. Another key element is that you have plenty of time. People are in an unbelievable rush to buy a stock. I'll give you an example of a well-known company. Walmart went public in October of 1970. In 1970 it went public. Already had a great record. It had 15 years performance, great balance sheet. You could have waited 10 years saying you're a very conservative investor.
You're not sure this Walmart can make it. You want to check. You see them operate in small towns. You're afraid they can only make it in seven or eight states. You want to wait until they go to more states. You keep waiting. You could have bought Walmart 10 years after it went public and made 35 times your money. If you bought it when they went public, you would have made 500 times your money. But you can wait 10 years after Walmart went public and made over 30 times your money. There you have it. Peter Lynch from 1994. I will wrap it up right there. Thank you so much for joining me.
Please do boost in if you found this valuable. My node now actually should be sorted. I think I had some channel issues that I didn't realize in the last episode. So some of you tried to boost and it failed. But it should be working now. And I'd appreciate a little bit of help testing it if you'd like to send a boost in. Links to what I talked about today are at thisweekinbitcoin.show. And I'm going to leave you with a song that really spanks. So you've been warned. You've been warned. This is Jim Cramer pumps CrowdStrike and dumps Bitcoin by Anonymous. Bitcoin is about to go down big. And I would sell my Bitcoin right into this rally.
And believe me, I had been a believer one time in Bitcoin. Not here, not now. One company that seems to be immune because it's now the king of cyber, which is CrowdStrike. Now they report June 4th. This company has yet to miss a quarter since it came public. That's the last remaining domino, and I don't think that domino is going to... Music.
Special Report Edition
Four Horseman of the Marketpocalypse
Unraveling the Yen Carry Trade
Bitcoin and Value Perception
There is an Election to Win
Historical Market Volatility
Learning from Past Market Declines
