Trillion Dollar Questions

When the world is on fire, it is not a good time to talk about prices. There are more important things in the world.

Those things however go beyond the scope of this newsletter and markets do not sleep.

Global markets, whether crypto or equities, have seen major drops over the past 24h as Russia’s invasion of Ukraine kicked off. Crypto’s Market Cap dropped more than 10% within minutes when events first started to unfold.

BTC was no exception here. In the meantime, Gold, the old, battle-tested hedge against macro risk, finally saw a major break-out. BTC is King of Crypto, but it is not yet the safe haven that many imagine it could become one day. Expect major volatility to take over in the next days, maybe weeks or even months.

Will the war be short and decisive? Or drag on for months? Will Russia be removed from the global financial intermediation system SWIFT, maybe even start using Bitcoin to circumvent the international financial system? Will the FED postpone its rates cuts? Many questions, very few answers.

There is a grim market wisdom to buy when there is blood in the streets. Looking back in time, the March 2020 COVID market crash was a major bottom.

Today, the Greed & Fear Index again points towards extreme fear. Is this time different? If we pair the ending paradigm of extremely cheap Central Bank money that fuelled a generational markets boom with a deteriorating global political situation, there is plenty of reason to be pessimistic.

But then again there were plenty reasons for pessimism in March 2020.

So is now a good time to be contrarian and buy?

That, truly, is the trillion dollar question.