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Crypto Markets In A Capitulation Phase - YouTube
Channel: TD Ameritrade Network
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joining us now wes full ford ceo of
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viridi funds to talk some bitcoin
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bitcoins lower today down about one and
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a half percent but still holding above
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that what's become a key 20 000 level so
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wes first of all good morning thanks for
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joining us want to talk to you about the
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action that we've been seeing in bitcoin
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i was looking at your notes and you say
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crypto markets are in capitulation so
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for equity markets i know that's what a
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lot of strategists are looking for to
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know a bottom is in so if crypto markets
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are in capitulation
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are they bottoming is bitcoin bottoming
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say at this 20 000 level
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yeah we're definitely seeing some key
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support i mean we're over the last five
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sessions we're back up to that 20 000
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sort of key mark for us um you know but
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you know despite the recent sort of
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positive performance sideways you know
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crypto still off 70 from its all-time
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highs
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45 in the month of june alone this is uh
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generally driven by broader markets and
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a liquidity liquidity crisis amongst
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industry participants you know a number
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of big announcements in recent weeks
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you know i i hear a lot of people say
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don't invest in crypto unless you can
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afford to lose it all because it could
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go to zero but in terms of how low
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you're seeing say bitcoin go
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what's your call how low do you think it
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could go
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yeah i think the next uh several weeks
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especially you know heading into an
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earnings season likely to see some some
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weak numbers um in in the public equity
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markets like there's there could be more
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pain to come for sure but you know
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you've heard this analogy
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uh i'm sure a million times by now like
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as a as a
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store of value uh with a tangible input
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input cost that goes into the creation
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of of new bitcoin through through the
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mining process and validating and
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clearing trades there's actually um sort
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of a value that underpins the the you
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know an individual bitcoin and uh
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frankly i think there's more
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a lot more upside potential right now
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than downside risk based on current
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pricing and um it's a question of time
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when we head to our you know the next
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new high and it might be sort of
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trending that way later this year
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certainly on the back of
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q2 earnings once we see some of the
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weakness shake out
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so are you buying at this level at 20
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000 for bitcoin and what could that
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next leg up look like are you in the
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hundred thousand camp for bitcoin
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i think it's frankly gonna be higher i
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mean we've seen this uh time and again
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in the evolution of this protocol um you
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know the the noteworthy
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market development would be the run to
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twenty thousand dollar today high in
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december of 2017 we saw it pull back to
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a low of around 3 200 a year later
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this is just
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again a capitulation
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um
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market correction router liquidity
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crisis risk off
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mentality amongst the investors and i
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think as soon as we see things
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stabilized and everything's trending in
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the right direction form of like
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commodities pulling back hopefully a
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more measured pace of interest rate
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hikes going forward
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but as a store of value looking for you
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know wealth protection going forward
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this this asset class the protocol
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itself i mean it's never made more sense
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um and and we're anxious to see this
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sort of um
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you know uh dissect or or remove itself
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from broader trends and in the public
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markets equity markets and uh i'm i'm
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optimistic you know in a year's time
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we're we're approaching new all-time
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highs
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that being said there are so many
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negative headlines out there right now
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we have voyager digital declaring
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bankruptcy we have the crypto hedge fund
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free arrows going bust
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celsius babel finance
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pausing withdrawals we have coinbase
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cutting jobs are you concerned about the
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broader implications of of what's going
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on in this space uh moving forward for
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crypto just in terms of when it comes to
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trust
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yeah as a
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like the as an emerging sort of
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asset class and all the protocols and
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companies that have have
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been been incubated and grown on the
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back of this
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novel sector
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for lack of a better term
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the
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you know it's not being held to the same
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sort of standards as traditional banking
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sector in terms of the reserve protocols
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etc so like there's there's you know
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obviously evidenced by
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some of the recent announcements there's
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been an incredible amount of leverage in
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the system and that's what you're seeing
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right now it's a you know liquidity
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crisis playing out you've seen you know
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voyager digital declared as you
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mentioned bankruptcy yep yesterday but
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you know prior to that we're freezing
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client accounts they're not the only
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group coin flex babble all freezing
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client accounts and withdrawals there's
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a there's a massive liquidity of crisis
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here there's been an incredible amount
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of leverage as this plays out and you
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see some survivors of last resort step
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into the
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meaningful
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businesses out there that do have are
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well positioned to sort of capitalize on
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the next boom and and move in btc and
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other digital assets i think uh it's
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only a period of time of of temporary
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pain and
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again once the macro markets stabilized
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here we're optimistic that
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there's good things to come
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what's going on in the mining space wes
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like mining sector is somewhat unique
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obviously being caught in the downdraft
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of of all things crypto and digital
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assets but
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i'm a former ceo of one of the public
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listed miners and
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we run an active strategy in the etf
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that we manage and it's you know the
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mining business itself
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is
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there's a real economic industrial scale
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business that underpins these operations
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the form of
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uh block validation clearing and
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validating trades they're paid in btc by
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the protocol
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if you're running new gen equipment
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drawing 30 watts per hour to generate
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that terra hash one trillion attempts of
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computing power per second and getting
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into the weeds here but um you know
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you're able to generate gtc
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at a
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you know cost of around 8 500 still
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there's still plenty of margin in these
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businesses the the operators that have
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done a good job managing their balance
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sheet um you know avoiding over
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extending themselves through you know
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equipment finance or convert structures
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on their balance sheets i think are well
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positioned to go out and acquire some
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assets on the cheap some fire sales from
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from the miners that haven't done as
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good as a job and and they'll they'll
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weather the storm without question
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there's a there's an economic business
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here
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and you know especially underpinned by
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some of the assets sitting on these
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balance sheets this trend toward
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huddling production started in january
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of 2021 there's still you know
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significant inventory sitting on the
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balance sheets here and a real economic
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business underpinning these equities so
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we're we're bullish
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so as you look forward obviously there
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we're still kind of figuring out what
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what it is that crypto um
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how it's seen i mean obviously there was
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calls for it to be an inflation hedge
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doesn't seem to be the case it's become
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far more correlated to the equity
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markets than i think many had thought so
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if we do in fact see
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a bounce in the equity markets or a more
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sustained run higher is that when you
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expect crypto will will see a turnaround
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as well
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i i would certainly hope i mean we're
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obviously as disappointed as all market
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participants in terms of not not seeing
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crypto sort of move in an uncorrelated
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nature to the broader markets um but but
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again that that value proposition is the
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store of value that the predictable
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supply
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annual supply growth the capped
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inventory or supply that will inevitably
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be outstanding at 21 million coins i
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mean there's no
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comparison to fiat currencies in terms
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of store of value and how i want to
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protect my heart and income and wealth
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for the long term despite the volatility
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we've seen in crypto markets i think
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it's a better solution
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as a digital version of gold with real
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utility
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um and but but everything's breaking
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down to be to be a great friend
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i'm i'm shocked and surprised that we're
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not seeing gold at three or four
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thousand dollars an ounce as a former
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mining or investment banker here in
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toronto um but but again there's it's a
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liquidity crisis there's just a general
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risk off trends flight to safety and
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significant us dollar appreciation in
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recent days i
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hard to make sense of all of this stuff
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but um you know cautiously optimistic
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that crypto will find its time in the
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timeline the near term in the in the
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limelight the near term and and um
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people will respect what it actually
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represents
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all right so we'll leave it there
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cautiously optimistic west fulford ceo
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of ready funds thanks so much
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thank you
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you
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