On Sunday (May 2), prominent macro-economist Alex Krüger, who is the founder of asset management and advisory firm Aike Capital, explained why is bullish on crypto and what he thinks will happen to the crypto market in the short and the long term.
Krüger said on Twitter:
“There’s more on the way. Apple Pay. Samsung Pay. Paypal has seen a sharp increase in user engagement thanks to crypto. More fintechs are coming! The corporations domino has barely started. Sovereign wealth funds come next. And more asset managers.
“Inflows into bitcoin and stablecoins to equalize yields will continue to be massive. Yields in the meantime are about zero outside of crypto. Real yields are negative! That means cash is trash, and in look for a better home.
“For as long as long rates stay controlled, the macro will be very supportive. And the likes of the Fed and the ECB are highly motivated to keep long rates low. Or everything goes to hell.
“Then you have CBDCs, which are *the* next big thing. CBDCs will allow central banks to further digitize the economy, and run ledgers and smart contracts. This will make interaction with public blockchains easy, and will push people in search of a less intrusive state to crypto.
“Crypto is undergoing a multi-year bull market. A macro cycle. Don’t need a chart or a model to understand why the upwards trend remains intact, just vision, understanding of economics, and common sense.
“As far as the short term goes, notice how the market got ultra bearish recently, after levered longs blew up. The rally that proceeded was spot driven. Much of the market is either flat or short. If price dips, they’ll be looking to close shorts. If price pops, they’ll stop out.
“This is the first time price is approaching 60K without the market unsustainably overheated. Right before the Coinbase IPO quarterly basis hit 51% annualized. Meaning you could secure that yield without market risk. That is now 24%. The rinsing of leverage was extremely healthy.
“Don’t forget ETFs.“
Yesterday, Krüger also addressed the criticism from cryptocurrency haters that “crypto is destroying the environment”:
And the final touch:
Nobody is complaining at people for wasting energy in luxury trips, 60 inch TVs and other “unnecesary” things. Meanwhile crypto consumes electricity but it actually solves problems and adds value.
Need to put things in perspective.
— Alex Krüger (@krugermacro) May 2, 2021
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.