Hey everyone kevin here, this video is sponsored by masterworks but more on them in a moment. First, we've got to talk about how the federal reserve and what the fed just said today in my opinion, gives us the license to see bitcoin hit 120k and 10k ethereum. I'm going to explain exactly why in this video, let's get right into that first, i believe, based on surveys that i've done and research that i've done that at least 40 to potentially 55 of individuals who invest in cryptocurrencies or cryptocurrency assets do so because they see Cryptocurrencies as a hedge against inflation, they see real estate out of reach, which is a traditional hedge against inflation, at least leveraged real estate is, and they see that fiat or just holding dollars is obviously not something that is going to hedge you at all against inflation. If anything, you are most exposed to inflation holding on to dollars, in fact, you're more protected from inflation in the stock market than you are holding cash.

Obviously, cash is nice for opportunities, but hey. Why not? Instead of hold cash or holding cash hold cryptocurrencies, which are also extremely liquid, that you could use for opportunities as they present themselves. For example, if you're going to hold cash to go, buy stocks on the dip, you may as well hold money in cryptocurrencies and then buy certain stocks if they dip after earnings or whatever. If you wanted to preserve your wealth, your cash wealth and protect it from inflation, while at the same time having the liquidity to go purchase, something in the event that there's a dip.

Obviously that works well, unless of course, bitcoin or ethereum or all of a sudden. Plummeting, which entirely could happen, but that's the benefit of bitcoin or ethereum, is because there's volatility. The goal is that you would make money and be protected more from inflation. But what did the federal reserve just say that actually gives us a license to see bitcoin and ethereum run substantially? Well, it is actually a wind behind what i've been talking about all year, and that is that i think 2022 is going to be the year that cryptocurrencies really take off.

I think that's when we're really going to see a push for a real bitcoin etf, not a futuristic etf. I think that's where we're going to get actual stablecoin regulation, which will be bullish for the market, in my opinion, because it should help us limit excesses of leverage which i understand, the traditional banking system has lots of leverage as well. I get that, but we want to make sure that we're not like 10 times as leveraged as the regular market, because then we could be really building cryptocurrency valuations on uh. You know sort of toothpick foundations and i don't like investing in things that are on toothpick foundations.

I like companies or assets that have really solid foundations and then fluctuate, and hopefully, in the long term, go up in price right, but anyway, that philosophy aside, the federal reserve is essentially telling us a few things one. They told us that inflation is not under control. They said that we're working to get inflation under control so, in other words, italics right now. Inflation is not under control, which many of us already knew that, but it actually was uttered by the fed.

Today that inflation is not under control, they also say that they expect inflation to last until q2 and q3 of 2022. That means anywhere between april and september of 2023 or sorry, 2022 is when we would expect to continue to see inflation until, and my expectations are that even when inflation starts ticking down, we're still going to have higher wages and higher rents that are going to have. This sort of lagging inflationary impact pushing inflation up even more now, we could potentially see crypto do really well the first nine months of 2022 and i'm bullish about that. I do think that it's possible crypto markets are going to start trying to price that in starting, even this month or december of this year, trying to price that expectation in, but we could potentially see a downward catalyst for cryptocurrencies when that inflation starts inflecting down as Individuals potentially see less of a reason to be in cryptocurrency at least those individuals were using it as an inflation hedge.

Obviously, if somebody's in something because of an inflation, hedge or their goal, is to hedge against inflation and inflation goes away, then it would make sense that they would be sellers of something that's otherwise their inflation hedge right, like when inflation goes away. Maybe you dump gold and you take it and you go buy some other assets like tech stocks or whatever you want to do so, while i do think we'll have that that shift, i do think it's going to take long, not only going to take longer, but When that shift starts coming, i think that shift is not going to be a dramatic drop in inflation. I think we're going to see a little bit more of kind of a slow bleed out of inflation because of the lagging impact of wages still going up and of rents still going up. The next part of this video is sponsored by masterworks.

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So what's a strategy for investing around all of this well, in my opinion, here's my strategy. My goal is to be about eight to ten percent crypto as a tool where i park money either when i'm saving for taxes or i'm, i can't find any goods uh stock deals. So, for example, if there's no good stock that i can see, that's selling for a big discount park, eight to ten percent of my money in cash, but rather than it actually being in us dollars i'll have that in crypto, so that'll be bitcoin, ethereum and cardano. Those are the big three that i'm parking money in.

I do own some smaller amounts of different altcoins, but these will be my big core positions, so, like 95 plus percent will be these core positions, then what we'll do is, as i see the inflation potentially start. Inflecting down i'm going to really want to pay attention to have we hit some new highs and are there going to be opportunities to potentially take profits? So that way, let's say i put 10 percent of my stock trading portfolio or let's say i put three million dollars aside for cryptocurrency uh cash that i have sitting on the side and for opportunities where i'll sell the crypto and buy stocks when opportunities come up. If that crypto becomes more valuable, let's say it goes up by 30 and all of a sudden i have 3.9 million dollars, i'm going to probably shave that extra 900k once we start seeing inflation turn and then only when i start seeing inflation turn will actually move That extra crypto to cash but i'll only start shaving. Well, if, as long as i'm not on margin, if i'm on margin, that's different for me, margin is like get rid of borrowed money like be out of margin, but i have no margin right now.

So the rest will go into crypto until i see inflation starting to rotate down. Until that happens, it's going to make sense to, in my opinion, continue to focus on the larger core cryptos for the bulk of your portfolio, bitcoin, ethereum cardano, maybe solana, even uh, and the rationale behind that is as much as it's fun to trade. Some of the smaller tokens i wouldn't put a large portion of my portfolio in i'd, probably put somewhere around that same thing. I could do with stocks five to ten percent into shorter term trades and hey.

If you hit it really hard and you double or triple you take that money out then take maybe half of that or three quarters of that gain start, throwing it into that bitcoin ethereum, cardano solana, pie that way, you're diversifying and then go play again. It's kind of like going to the park. Hopefully, you win big, bring back load up your other core positions and then go back into the market and try to go shopping again for that opportunity kind of a strategy i have, but in my opinion, this move by the federal reserve to essentially admit that inflation Is out of control right now that they expect it to go down in between q2 and q3, but in the meantime, they're going to continue to print money until probably june of 2022, when the taper completes and they're, not even certain they're, going to raise rates at That point it's all gon na have to do with what inflation does at that point. Well, it's possible, in my opinion, that cryptocurrencies just continue to do well up until that point now no guarantees because the market likes to try to anticipate inflation going down.

And in that moment, when we see inflation, start trending back down again, we'll probably see a little bit of anchoring on the price of cryptocurrency. So my opinion, a lot of crypto price right now is not going to be related to stock to flow. But in the short term, it's going to be related to inflation and we do have cpi data coming out soon. So let's see cpi data release and let's look at expectations as well.

For this i think that'd be good, so the next cpi data release is actually pretty soon. It's coming out november 10th. That's going to be cpi data for october. Remember they always report one month behind so november 10th.

That's next week, uh wednesday actually is when it comes out so one week from today and then we're gon na get a report on what inflation is like for october. We know that inflation came in a little hotter in september, but we did also have more coveted shutdowns. We have seen some costs start coming down like used. Autos have come down a little bit, but they've also been kind of fluctuating back up.

We have seen lumber push back up, but that shows up in things like the producer price index and not in the consumer price index, which is just another thing, that kind of adds to a little bit of confusion, because you do have these different measures of inflation. I really think they try to almost confuse us on inflation, which is kind of annoying, but anyway uh. Let's uh, let's go ahead and look at the expectation. So if you have not yet marked your calendar november 10th is the day that you want to mark your calendar.

If we get a big beat on inflation numbers, i'll probably buy crypto like my goal is going to be to sit there right at 5 30. When that inflation report comes out and then buy or sell crypto based on what i see happen that moment, so i'm going to be sitting here with my coinbase and i'm going to be ready to go all right so 10th, cpi, month over month. The survey is showing an expectation for a 0.6 percent increase increase. That's up from point four percent.

Last year, a point: six percent increase. If we hit that expectation, that's a seven point: two percent annualized inflation rate - that's very high. This expectation is that this inflation report is going to come in high and if it does come in high, i think that's going to be a bullish scenario for crypto, even if it misses the expectation is this high. It would have to miss dramatically, but anyway, cpi uh at uh 5.8 percent year over year.

Uh is the expectation, that's not the annualized month-over-month version and then it looks like we're expecting uh cpi, without food and energy to be at 4.3. These are all increases of around 8 from last month, so the expectations are very high for inflation uh for the october report uh, i don't we're not gon na get any inflection point this year on inflation. It doesn't look like, and jerome powell himself said we're not going to see. You know real moderating of inflation until the middle of next year.

In my opinion, bullish for crypto bullish sign for crypto, so we'll see what happens uh very interested to to track what happens as well over the next few days as we lead into that inflation report. But right now the expectations are definitely high. So these are my thoughts on why the federal reserve has kind of given a license for cryptocurrencies to do very, very well over the next year and folks, we'll see the next one. Thanks again, you.

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