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| By Juan Villaverde |
War flared up between Israel and Hamas over the weekend. But this latest outburst of violence — while hardly a plot twist in the region's historical drama — threatens more than just local stability.
You remember oil, right? That old-fashioned liquid gold that powers most of our world?
At the time of writing, the price of oil is roughly $85 a barrel. And that’s during a time of relative economic quiet.
If the instability in the Mideast spreads — as it quickly can, bringing other countries into the chaos — then the price of oil can be on quite the ride.
Don’t believe me? The 5% surge in oil prices last weekend says otherwise.
But the contagion doesn’t stop at oil.
If you've been paying attention, you know that Western bond markets are already dancing on a knife’s edge: The world's drowning in debt. One wrong step, and it's a global bankruptcy bonanza.
And that one wrong step could be because of oil. See, oil and U.S. Treasurys are intricately linked. Nations hoard U.S. Treasurys to buy dollar-tagged oil.
Think of those Treasurys as a global piggy bank that's always at risk of a hammer. That hammer, in case you’re wondering, is used whenever oil prices surge.
This means a surge in oil prices threatens the stability of an already shaky U.S. Treasury market.
And in today’s era of financial fragility oil doesn’t need to reach for the stars to push us into an economic black hole. A 40%-50% uptick should do the trick.
When that happens, expect the world's elite money printers to come running. They’ll call it “financial stability.”
And that brings us back to Bitcoin (BTC, “A-”). Remember, when instability surges and money printers are whirring, investors flock to save haven assets to store their wealth.
And while gold has been the traditional darling, Bitcoin has been the latest belle of the ball. We expect it’ll outdance everyone else.
For those riding the Weiss Crypto wave, you’re already several moves ahead.
If you’re not yet on the dance floor, pullbacks and corrections should be seen as opportunities to grab some Bitcoin for your rainy-day waltz.
I anticipate a storm on the horizon.
Alex Benfield’s Notable News, Notes & Tweets
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Some of the allegations coming out of the trial of FTX founder Sam Bankman-Fried are frankly shocking. If the rumors of a $5 billion bribery attempt to stop Donald Trump from running for office didn’t shock you, SBF also allegedly gave away IDs of Thai sex workers to the Chinese government to unfreeze $1 billion of Alameda funds.
- If you think interest rates are getting too high in America, just know that things could be worse. Rates just hit 133% in Argentina.
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Speaking of government debt, Ryan Selkis of Messari reminds us of the scale of the current debt and deficit — it’s the government spending that is causing this issue.
What’s Next
Amid the current tumultuous backdrop, cryptocurrency is ready to rise from the ashes of this year’s neutral market like a phoenix.
As 2023 winds down, the signs are converging: We're on the cusp of the crypto market's final dip before a resounding bull run in the forthcoming year, when we anticipate several macroeconomic factors to converge.
So, while the world's dance floor is in disarray, crypto enthusiasts might just find themselves leading the next global financial waltz.
The question you need to ask yourself next is what names are making it on your dance card. To help you find an answer, I suggest you watch this timely video.
It breaks down our Crypto Timing Model and how it can be used to target the best crypto opportunities at the right time.
It won’t be up long, however. So, I urge you to watch it now, while you can.
Stay poised and patient, for the crescendo is nearing.
Best,
Juan
