#987 - Is It Time To Have Crypto In Your Portfolio? | with Tony Greer

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0:56Is it time to have crypto in your portfolio? Hi, everyone. Welcome to the Real Vision Daily Briefing. With me today is Tony Greer, editor of The Morning Navigator. And kicking us off, Raul Powell, founder and CEO of Real Vision. Hi, gentlemen. Hello, Maggie. Hey, Mackie. You know it's a busy, exciting day. We have double trouble. There is a lot to talk about. We had U.S. stocks down sharply, led by a big decline in Apple and some others. While on the flip side, Bitcoin hit a new all-time high before pulling back. And a lot of the stocks associated with crypto, like MicroStrategy, had huge gaps up.

1:31So there's been a lot happening. Raul, we wanted to pull you in quickly to just give us your thoughts about what's happening with this rally. I mean, is this part of the crazy volatility? Is this the start of something new? How are you viewing all this? So you've got to think of crypto as the most ludicrous market you've ever been involved in. It has the highest returns, the highest volatility, the biggest drawdowns, the best memes, the most stupidity, the most angry people who hate you because you're involved. It's like everything in the world turned up to 11. So it's the most befitting thing in the world where everyone gets super excited about new all-time high and Bitcoin.

2:11It prints the new all-time high, does a massive reversal, and everyone's like, oh, we're poor again now. And it's kind of like the other thing about crypto, unlike traditional markets, it's so easy for regular people to have leverage. So for some reason, even though you warn people and tell people and beg people not to take leverage in a 70-vol asset, they still do it. And so what happens is, it might even be just a small position, but it builds up, builds up, because they all get confidence. Then something happens, and it's like, you get liquidated, you get liquidated, you all get liquidated.

2:48We cleared out, I don't know, it was a billion and a half of liquidations in Bitcoin in like half an hour. Market resets, and off we go again. So it's kind of, you have to think of it as a computer game. It's so ridiculous. But as you know, I don't trade any of this stuff. I mean, I was buying all of my crypto back in November, December 2022. I don't think I've bought anything since January 2023. And I've just done a few asset allocation shifts. The idea is just to own your spot, own it for the cycle, and just do nothing. And it's really as simple as that. You get paid to do nothing. I mean, most of this stuff, Solana was up 10x last year.

3:35Bitcoin was up 160%. Everything's up 50 % this year, year to date. You don't have to do anything. You don't have to do anything at all. Yeah. I mean, it's kind of mind-watering, those numbers. And I think that's, Oliver just put it best. Crypto takes the stairs up and jumps off the roof to go down. And it is that sort of - Whilst laughing on the way down and creating memes when it happens. Yes, yes, exactly. That's part of the fun of the space. Everyone else takes everything too seriously. And it's a serious business we're in, but sometimes it's nice to laugh at stuff too. So you just made a really important distinction.

4:10And so we posed that question at the top because we are in a little bit of a different situation now because where it was really the insiders playing before and the early adopters like you now, we have ETFs. A lot of people are seeing the prints we've seen the last couple of days and sort of saying, is this something, is now the time? Should I get in? Should I be buying an ETF? And this is where, whether you're trading it or whether you're investing for the long-term, this question and distinction you made, I think is really important. And we know that there've been billions flooding into those ETFs, right?

4:43I think it was 8 billion for one, another one's approaching 5 billion. So for those listeners who are on the sidelines, who haven't, are not involved yet, but are considering it, And clearly, we don't give financial advice. Only individuals can figure out their own profile and what's right for your portfolio. But generally, for that contingency of our community, what's the risk-reward conversation people should be having when thinking about this? So firstly, look, I think Tony's going to talk about NVIDIA and other stuff a little bit later to explain the kind of mindset you have in a bull market.

5:20It's very different. And people, it's very difficult when assets move this fast, because you always feel like, oh, my god, I'm buying the top. It's going to be terrible. It's scary. But how you've got to think about it is we're getting into price discovery phase in Bitcoin, and most of the other crypto will catch up, and we'll all get to new all-time highs in the quality assets. The shitty stuff won't do, but the quality assets will go to all-time highs. You don't know how high they go. Usually, it's somewhere between 3 and 10 times the previous all-time high. OK, so even when you're at the all-time high, you've got significant upside from here.

5:58If we're not at the business cycle point where things turn lower, which tends to be later on, 2025, later in 2025, maybe if it comes early, it's the end of 2024. Either way, that's when you get larger drawdowns. So you're going to see 35 % liquidations, but you've probably got a worst case 100 % rally from here, and the best case, whatever, depending which asset you choose. So the risk reward is always good. So if you are on the sidelines, look, for most people, you hold less of an asset that's so volatile. So you own less of it. And days like today, when there's liquidation, that's a great day to put some money at work.

6:40Now, is this the low today? Who the hell knows? Could it go low for the next week? I don't know. But if it does, you should think of it as a gift. For me, it's not a gift because I have no more money to put into crypto. So I just have to watch it. But that's what these are for. So you should not be scared of them. If you have a thesis and you understand and you think, okay, this market's going to go higher over time, then use sell-offs to your advantage to get slightly better entries where it's less frothy because it never feels good to buy something and then it goes in your face 10%, 15%, 20 % before rallying.

7:19It's always that's that always leaves a bad taste in your mouth. It's always nice if you can buy something that's that's on sale for no real reason, except people are liquidating positions because they got overexcited. That's a nice time to to stop adding to it. Yeah, Tony, I know we are going to dive into some of the other stuff with you after we say bye to Raul. But what you have any questions for Raul? Because I know you're you're looking at all this stuff, too. And you probably got a million incomings on it. Yeah, you know, with Raul's approach, though, he kind of disarmed my question, which was very clever of him to do ahead of time.

7:55I think he knew it was coming. And now, you know, put it this way. I look at this thing and from a distance and from the perspective of a novice, and I say it's, you know, like Raul says, it's batshit crazy. But when I look at the setup now, this rush, the way it traded into the ETF launch to the point that we had a sell the fact moment when they announced the ETFs right into a dip where we gave all of the world's slowest moving analysis paralysis institutions a head start on buying crypto via the ETFs that were just launched. Right. We got the rally right to the highs today. in a parabolic move.

8:41We have an outside reversal today where we tickle the all-time highs and then close a three sigma sell-off of 8%. Like this winds up and I'm afraid to tweet it because I get shoes thrown at me. I get called names. This lines up as the biggest short I've ever seen, ever. So that's why it's like, if I say, how could this not be a short? Or if I posture it differently and say, Has the fuse been ignited and we're going to go up forever now to see what he says? Or to say, come on, you know setups like this. Like, this is a sale. So that's kind of what I would put in front of Raoul and say, you know, from a trading perspective, it is literally following the first year trader's textbook on potential reversals.

9:30Like, today was the Icarus print. Hey, everyone. We're going to take a quick break right now to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing. Join over 5 ,000 attendees for the largest AI event in Asia at Super AI Singapore, June 5th and 6th, 2024. Raoul Pal, Benedict Evans, Balaji Srinivasan, Edward Snowden, and over 150 others will join the industry's most influential to explore and unveil the next wave of transformative AI technologies. Singapore will become a vibrant AI hub for a week from June 3rd through June 9th with over 150 side events that will make for unparalleled networking opportunities.

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11:29RAOUL PAL, MD, And also, it did another beauty. It exactly turned on the DMARC 9, 13 top. RAOUL PAL, There's another one. Throw that on the pile. RAOUL PAL, Now, if you're a trader, this is a great market too. If you know how to trade a bit of volatility, we should put all net gas traders to trade crypto because they understand volatility, but it's terrifying. but yes from a trading perspective different than time horizon for me great opportunities because you put in one of those big outside days you put in a demark top you had a bearish divergence on the rsi so okay most people are probably expecting a quick downprint and resumption but maybe because of this structural thing you have a down up down abc nice slightly longer correction, or maybe not longer in time, but sharper in price than people expect, that kind of stuff.

12:27And I think you're right, it's tradable. But then, where are we in the longer term time horizon? Well, we've probably got a lot further to go. So if you're a trader, you're like, OK, I can trade both sides of this and make money. Now, I'm a terrible trader, unlike you. So I just stick with the long term pattern, which is bottom left, top right. It keeps doing it over the last 10 years I've been doing this. So why change that? But from the perspective of trading, that's what a lot of people like to trade it, if they don't mind volatility. It's tough if you want to use a bit of leverage and do the kind of old school way you might trade bonds.

13:05You're just going to get carried out in this. But if you're used to commodity trading, gold actually trades like this, not quite as volatile. But gold does, breaks out, fails, goes back down, then goes up. It's a pain in the ass to trade. Silver's even worse. So it's kind of similar to that. Sure, it surely is. Very much so. Which explains why Tony asked the question, because we just had this conversation last time Tony was on about trading volatility. And it feels like a stressful market. And they get Tony on, and he's jumping out of his seat because of all the opportunities he sees to trade that volatility.

13:39I think that - Yeah, because the difference between Tony and I, Tony's a good trader and I'm shit. So that's the fundamental difference. That's why he's in the marketplace. I'm just obsessed by the ability, you know, there's like a pinball machine going on over here that's generating 20 and 30 and 40 % moves in a week. It's like, how could you not, I'll wait in line to play on that pinball machine. You know what I mean? Like that's where the game's going on. I mean, if this thing was a commodity ring, there would be people hanging from the chandeliers. It'd be so packed, the ring. You know what I mean?

14:09like this thing is where the action is. I mean, that's why it consumes quite all of Twitter eventually, because it's exactly that. It's like the most active commodity pit of days of old. Everyone wants a bit of the action. Whatever your time horizon, it works for kind of everybody. TINA WISDOM So it's always my job to inject a caution here. And you said something earlier at the beginning, Raoul, which is that it's unlike many other markets, and I would include commodities in that, Tony, ordinary people can access leverage easily. Leverage is extremely dangerous, though. You really need to know what you're doing.

14:45And when Tony talks about stuff, he has years and years of trading the hardest markets there are, which are commodities, which is why we lean on his expertise, why he's in the marketplace for us. That is not everybody's lane and should not be everyone's lane, especially if you're playing with money that you don't have access to. That, Raoul, I think is something hopefully everybody learned the first go around. And when we went into winter and people got wiped out. This is part of my don't fuck this up thesis. If you want to get involved, it's life changing. It's the biggest macro trend we've ever been given.

15:19It's the best performing asset in all recorded history in the shortest period of time. And it continues to be the gift that keeps on giving. Everyone writes it off every time it does a down 80%. And 18 months later, it's back at all time highs, making everybody look like idiots. So the game is not to fuck that up. And the classic way of doing it is using leverage, because you will lose your mind. You will do stupid things like here is an asset class that goes up stupid amounts. And for some reason, that little voice in your head says, you know what, if I just got five or 10 times levered, I could make 10 times as much money.

15:55Are you bananas? It goes up 100%, 200%, 300 % in the year. You don't need leverage. And so just stop doing that and stop FOMOing because today was a classic FOMO day, right? Most people would like, it's broken all time highs. Don't do that in crypto. It will make you look stupid. And just, again, just have a plan, stick with it. Don't use leverage. Use the right time horizon. Unless you know how to trade really well, like Tony, don't touch it in that time horizon. Just buy and hold it and forget about it. It's fine. Yeah. And rely on the experts. Rely on the experts to help guide you. That's what they're there for.

16:40Speaking of, don't fuck this up, we are doing another series, a really important one on that theme for the next two weeks. and we just sent an email out today, hit my inbox saying that crypto and macro are the same. Everything's kind of merging and you're going to need to understand all of it if you want to plot your financial future. So super excited about that. You're going to be having some conversations and we're going to have great guests on. Yeah, it's all around the how to unfuck your future idea that is difficult for people. So I just recorded a piece about a lot of this today. So yeah, look, there's going to be a lot of informational value for people just to give them an opportunity to see the bigger picture of where it's going and how to take advantage of it and get out of the kind of mess that everybody's in, which is their wages don't go up, assets get more expensive, and life feels like it's always getting away from them.

17:37Yeah. So we're going to try to help arm people with some information, and we're going to have some really cool workshops that will give you a lot more information about that, but just want to put that in everyone's calendar. All right, Raoul, we're going to cut you loose because I know you have a lot of money. have a million other things that you have to get to, including some tapings for all the kind of cool stuff we're going to do. So thank you for stopping by. I will leave you with the maestro and he will give you a special masterclass. He always does. All right, gang, take care. Good luck everyone out there.

18:06Thanks, Raul. You can tell he's having so much fun with this, Tony. So let's pick up and we've got a bunch of questions already coming in. So let's just go right to it. But I want to talk about the one other thing that was really moving. And it's kind of on the flip side of what we were just talking to with Bitcoin, though volatile. And you flagged this. I know it's on your radar. And that's the sort of disaster that's happening over in Apple. What are you looking at there? Why is that important? Well, it's interesting because Apple's a fallen angel now, right? All of a sudden, the technology markets are taking off.

18:45There's leadership in the space, in AI. Apple's getting totally left out in the cold. The investor now is starting to realize that Apple stopped innovating a long time ago, that they just saw this morning that their sales are down in China, right, down to competition. So if the competition finally creeps in, that might be the end of Apple performance for a while, especially since you feel like I can almost make a case that Apple sell off is supporting Nvidia, you know, the new disco ball in the room, because people are definitely saying, oh, OK, I'll just get out of the last juggernaut stock and get into the next juggernaut stock.

19:23This won't be hard. And it may not be that hard because it looks like Apple, technically speaking, you know, has got further to go before we decide whether or not this bull run is over. Like I posted the chart up to you guys so we can just illustrate that it can pull all the way back to 150. And still that holds the, you know, 50, 200 week moving average there. That's kind of defining the uptrend. So, you know, there's room on the downside. We'll see what that does to the tape. Right. We know the tape has been overextended. We know that, you know, the fear and greed index is tilted towards greed.

20:01Sentiment is extremely positive. CTAs are long. RSI and stochastics have been overbought for four months now. So sure, we could be due to a little bit of a pullback here. But if you notice, NVIDIA scratched out and evened a positive day after being down all day. So that managed to come back at the leader of the pack. And that's why we had a serious, we had a two-segma sell-off in crypto, a two-segma sell off in Apple, in the software sector, with a lot of technology weighed down behind it. On the upside, we had energy and gold today, right? Goals quietly breaking to new highs, getting very little attention from anybody other than the gold bugs, which is great.

20:42Trend looks spectacular. It actually looks like it's about to do a$200 or$300 scoot because it's broken out of a range that it's been in for five years and looks like it can really fly now. I think both gold and Bitcoin are trading off of the idea that US debt is, you know, approaching 40 trillion at a rapid pace of like a trillion dollars every hundred days. That's starting to get everybody's attention. And so what's the natural move there is to, you know, protect yourself against fiat currency implosion and buy Bitcoin and gold. So that's a little bit of the rotation that we see. I'm praying for an equity sell off because I'm a raging bull and I don't think that sell-off is going to be fatal.

21:24I think it's going to be a massive opportunity given the things that we're seeing around the markets, like this strength in tech. We're seeing some of the cyclical sectors come alive now because we're seeing a total mixed bag in economics, right? We're seeing economic data slightly better, slightly worse, interest rates. Everything that happens in the interest rate market is reversion to the mean yesterday, You know, so there's no trending going on there. And that's a bullish cocktail for equities. So if that persists and the curve stays buried where it is right now, minus 35, minus 45 basis points in two's tens, man, that's a Goldilocks interest rate environment for stocks.

22:04So, you know, give me the give me the tactical pullback to trade and I'm going to put my chips on the table. So that just sets up where I think we are in the markets now, Mackie, without taking the microphone for too long. We're going to take another quick break to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

22:25yeah no i love it uh so it's it's interesting when every time we talk about nvidia because uh it is this and you know we had been talking about tech as a whole but now we're seeing this sort of uh bifurcation with apple struggling and nvidia up and every time we pull that nvidia chart up everyone's kind of like it's rallied so much it it has to go down it's kind of topping It's how are you thinking about that, those kind of momentum stocks? Man, they're fun to trade. And those are the ones that I'm in right now because we're still in the parabola, you know, and that's kind of like one of the things that Raoul alluded to it before.

23:06It's like, you know, the first time you hear somebody mention bubble, get right into it and start trading it like the bubble that it is, meaning NVIDIA to the upside. So NVIDIA is still behaving like it's in the parabola on the way up. You know, the way I'm looking at it is a lot of the street has got targets above here. We are seeing right now the dumb, slow mutual fund money, you know, piling into the sector. They're probably just going to buy it up until it hits price targets, right, that the street's got on it. And those are all around$1 ,000. So why can't it go to$1 ,000 tomorrow morning?

23:42I have no idea. I'm expecting it to, quite honestly, before it finds a top and backs off. So, you know, this is I think we're still in that we're in the late innings, but we're in that phase where sticking bids in NVIDIA on every dip actually works great. And so we'll see if that guides the market. What's amazing, like you said, is that, you know, some of the rest of the heavies like Google and Microsoft and Apple are all of a sudden backing off and NVIDIA refuses to cave. Sorry. So, well, excuse me. So we'll see how this all pans out, but it still feels like there's going to be tech buying. They're selling some big stocks to buy other big tech stocks.

24:20And we'll see what happens when the music stops. We're due for a little waterfall, and I'd welcome one. Yeah. So when we're talking about gold, I'm going to flip around, and then we'll get some questions in here too. Are we talking about the commodity? Do you feel like that gold rally can lift gold miners? We always get questions about that too, and some of the equities related to that. How are you thinking about gold? I think if you're hanging on to gold miners, expecting them to rally, I think you're delusional. Right. Gold is trading an all time high here at$2 ,130 per ounce. It's been on a beeline rally since it held the dip to 2020.

25:00And gold miners are still, I think, down on the year. They've almost clawed their way back to the middle of the range. So it's like, I feel like if I'm putting money in gold miners right now, I'm looking to set it on fire. I'm looking to say, I'm not participating in the gold rally. I'm going to lag behind in the last place with the gold miners. And I don't think it's a great idea at all when you can buy the commodity, like I said, which feels like it has a chance to have a two or$300 breakaway from the old range move now. And the reason I say that is because there is no spec long to speak of, right?