Top Recession Trades, Will Bitcoin Breakout Soon?
The post Top Recession Trades, Will Bitcoin Breakout Soon? appeared on BitcoinEthereumNews.com. The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now. Topics this week: Paul Tudor Jones 3 Trades Bitcoin, Ethereum and BNB Last week, I wrote about The Bitcoin-Gold-China Connection. I pointed to the recent bitcoin and gold indirect correlation, but also to several interesting correlations between the three assets. I want to revisit that topic upfront, because a pioneer of the modern hedge fund industry, Paul Tudor Jones, said in an interview that he is bullish on the “barbarous relics,” lumping bitcoin in with gold. “You know more likely than not, we’re going to go into recession, and there are some pretty clear cut recession trades.” Paul Tudor Jones’ Three Recession Trades 1) “The yield curve gets really steep, and the term-premium goes into the back end.” Translation: The short end of the yield curve falls relative to the long end. We already see this in the yield curve steepening, specifically the 10Y-2Y (2s10s) and the 10Y-3M (3M10Y). Yields tend to un-invert prior to recessions. In 2008, it took 36 weeks between un-inverting and recession. In 2020, it took 25 weeks, but easily could have taken longer. BM Pro chart. Projecting forward, the curve is still inverted, and if we estimate an un-inversion by November this year, a delay of 30 weeks takes us to July 2024. Not surprisingly, this matches the Fed Funds futures pricing in the Fed cuts we discussed in a previous letter. It also gives bitcoin plenty of time to rally through the halving. 2) “The stock market typically, right before a recession, declines about 12%.” We’ve written about this topic recently as well. While Jones…
The post Top Recession Trades, Will Bitcoin Breakout Soon? appeared on BitcoinEthereumNews.com.
The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now. Topics this week: Paul Tudor Jones 3 Trades Bitcoin, Ethereum and BNB Last week, I wrote about The Bitcoin-Gold-China Connection. I pointed to the recent bitcoin and gold indirect correlation, but also to several interesting correlations between the three assets. I want to revisit that topic upfront, because a pioneer of the modern hedge fund industry, Paul Tudor Jones, said in an interview that he is bullish on the “barbarous relics,” lumping bitcoin in with gold. “You know more likely than not, we’re going to go into recession, and there are some pretty clear cut recession trades.” Paul Tudor Jones’ Three Recession Trades 1) “The yield curve gets really steep, and the term-premium goes into the back end.” Translation: The short end of the yield curve falls relative to the long end. We already see this in the yield curve steepening, specifically the 10Y-2Y (2s10s) and the 10Y-3M (3M10Y). Yields tend to un-invert prior to recessions. In 2008, it took 36 weeks between un-inverting and recession. In 2020, it took 25 weeks, but easily could have taken longer. BM Pro chart. Projecting forward, the curve is still inverted, and if we estimate an un-inversion by November this year, a delay of 30 weeks takes us to July 2024. Not surprisingly, this matches the Fed Funds futures pricing in the Fed cuts we discussed in a previous letter. It also gives bitcoin plenty of time to rally through the halving. 2) “The stock market typically, right before a recession, declines about 12%.” We’ve written about this topic recently as well. While Jones…
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