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When Fed Quantitative Easing?🚨Global Liquidity Flood Incoming🚀 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Everybody is asking in the market right now, when is
• 0:02
  Speaker 1: quantitative easing going to actually happen. We're going to break
• 0:06
  Speaker 1: it down for you don't want to miss it. Let's
• 0:07
  Speaker 1: jump right in. Let's go over to our partners today
• 0:10
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• 0:12
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• 0:19
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• 0:52
  Speaker 1: started on going into self custy. Now, the point that
• 0:56
  Speaker 1: we wanted to break into today was really taking a
• 0:59
  Speaker 1: look at que and if you look at the market
• 1:02
  Speaker 1: and how it has responded with QE over the past
• 1:06
  Speaker 1: several cycles. This chart right here kind of breaks it
• 1:09
  Speaker 1: down for you. What you're looking at here is bitcoin
• 1:11
  Speaker 1: dominance against what we're seeing in terms of quantitative easing.
• 1:15
  Speaker 1: The green section is easing obviously, quantitative tightening is the red,
• 1:20
  Speaker 1: and then you have these little gaps that exist in
• 1:22
  Speaker 1: between these. You'll notice here that during tightening we have
• 1:26
  Speaker 1: bitcoin dominance going up, it starts to stabilize, and now
• 1:30
  Speaker 1: we're in a point now where quantitative easing could start
• 1:34
  Speaker 1: to occur. The key here, though, is the gap in between.
• 1:38
  Speaker 1: What does that look like over the next few months,
• 1:40
  Speaker 1: next few days, next few weeks. Let us paint this
• 1:43
  Speaker 1: out for you guys, because this is very critical on
• 1:45
  Speaker 1: where the market will respond. One of the things you
• 1:49
  Speaker 1: can kind of look at here, of course, is where
• 1:51
  Speaker 1: interest rates have a lot to do with this. So
• 1:54
  Speaker 1: as you can see here, quantitative easing begins when we
• 1:58
  Speaker 1: start to see the Fed funds rates start to dip
• 2:00
  Speaker 1: below two percent, and that's this red area that you're
• 2:03
  Speaker 1: looking at right here, So that's when we see the
• 2:06
  Speaker 1: injection of capital. All right, So what you're looking at
• 2:09
  Speaker 1: right here is this little section right here. What that
• 2:12
  Speaker 1: simply means is this is going to stabilize the market
• 2:15
  Speaker 1: around easing. This of course, is going to be in
• 2:17
  Speaker 1: conjunction with a lot of rate cuts that are going
• 2:19
  Speaker 1: to be coming down the pipe. And this question is
• 2:21
  Speaker 1: is how many of those rate cuts are going to
• 2:23
  Speaker 1: be able to get us under that two percent window,
• 2:26
  Speaker 1: which is where QT or excuse me, QE will begin.
• 2:29
  Speaker 1: This is the thing that we're looking at right now, polymarket,
• 2:32
  Speaker 1: how many FED rate cuts in twenty twenty six. Right
• 2:36
  Speaker 1: now you can kind of see, well, we've got three,
• 2:37
  Speaker 1: there's a four in there, but if you look at
• 2:39
  Speaker 1: the chart, you'll start to see that once you get
• 2:42
  Speaker 1: above four, add those all together, you have fourteen percent
• 2:46
  Speaker 1: on five, six, six percent, seven, five percent, eight rate
• 2:52
  Speaker 1: cuts four percent.
• 2:53
  Speaker 2: You start to.
• 2:53
  Speaker 1: Accumulate all this, and what we're looking at is a
• 2:55
  Speaker 1: probability of maybe plus forty percent of geting four or
• 3:00
  Speaker 1: more rate cuts in twenty twenty six. That would be
• 3:03
  Speaker 1: gargantuan because it starts to lead into something that we've
• 3:06
  Speaker 1: talked about for a while, and that is the.
• 3:08
  Speaker 2: Release of liquidity.
• 3:10
  Speaker 1: The reason this plays into liquidity is everybody is parked
• 3:14
  Speaker 1: in money markets, stable coins, earning yield, all of these things,
• 3:18
  Speaker 1: those will immediately get impacted and we'll see a drawdown
• 3:22
  Speaker 1: of that liquidity and it's going to be looking for home.
• 3:25
  Speaker 2: Now.
• 3:25
  Speaker 1: The key is where are those early market movers going
• 3:28
  Speaker 1: to go? One thing that could make the FED respond faster,
• 3:32
  Speaker 1: even faster. What we may see right now in early
• 3:34
  Speaker 1: twenty twenty six is what's happening in Japan right now.
• 3:37
  Speaker 1: Nine years ago we had a thirty year government bond
• 3:39
  Speaker 1: yield hit a record low of point oh two. Now
• 3:42
  Speaker 1: it's a record of point three point four to three.
• 3:44
  Speaker 1: This is a huge increase. So basically, the yen is
• 3:47
  Speaker 1: going to start being able to utilize the market in
• 3:50
  Speaker 1: terms of how it will affect the US market. And
• 3:54
  Speaker 1: this of course is going to get into the liquidity
• 3:56
  Speaker 1: release I'm talking about. Now, let me go to a
• 3:58
  Speaker 1: clip real quick because this will get into a little
• 3:59
  Speaker 1: more detail on why the FED might respond to the
• 4:03
  Speaker 1: Japanese situation.
• 4:04
  Speaker 2: Take a look.
• 4:05
  Speaker 3: One of the things that could happen is Japan has
• 4:08
  Speaker 3: been a big buyer of treasuries. Obviously we know China's
• 4:11
  Speaker 3: also a big buyer of treasuries. Maybe they need to
• 4:13
  Speaker 3: raise cash in order to support liquidity, they might have
• 4:16
  Speaker 3: to unload treasuries in order to do so. I think
• 4:18
  Speaker 3: the FED probably steps in first and doesn't necessarily say
• 4:22
  Speaker 3: that it's because of this. But there's already a couple
• 4:26
  Speaker 3: of firms out there talking about the FED needing to
• 4:28
  Speaker 3: expand its balance sheet again come later this month or
• 4:31
  Speaker 3: even in January because of the liquidity that's dried up
• 4:35
  Speaker 3: in some of the overnight lending markets. But it might
• 4:37
  Speaker 3: be getting uncomfortably tight for the FED, in which case
• 4:40
  Speaker 3: they will act in order to support liquidity of markets
• 4:43
  Speaker 3: because one of their mandates, and it's not one that's
• 4:45
  Speaker 3: talked about very much, but one of their mandates is
• 4:47
  Speaker 3: financial stability and the proper functioning of markets. So if
• 4:51
  Speaker 3: they need to do something to support just those overnight
• 4:54
  Speaker 3: funding markets to create liquidity just for the banks, I
• 4:58
  Speaker 3: think they will.
• 5:00
  Speaker 1: So there's a lot unwrapping here. Of course, many people
• 5:02
  Speaker 1: would look at this and say, well, listen, if Japan
• 5:05
  Speaker 1: unwinds their trade against the US Treasury, that puts a
• 5:09
  Speaker 1: lot of pressure on the Dixie, the dollar. It also
• 5:12
  Speaker 1: puts a lot of pressure on the United States because
• 5:13
  Speaker 1: we have chosen the route of stable coins. Now the
• 5:16
  Speaker 1: question will be if yield is going down on the
• 5:18
  Speaker 1: stable coins because interest rates are dropping, what happens to
• 5:22
  Speaker 1: the situation around stable coins. Well, the only solution is
• 5:26
  Speaker 1: probably going to be velocity, and that's going to get
• 5:28
  Speaker 1: into how much is it being used? And that's the
• 5:32
  Speaker 1: key thing that I think has to be done and
• 5:34
  Speaker 1: adopted here, which is why all this regulation is so
• 5:38
  Speaker 1: important right now. If you look at Circle stock, this
• 5:41
  Speaker 1: is the weekly Remember we go way up here after
• 5:44
  Speaker 1: it's opening one hundred and eighty bucks. Circle has been
• 5:47
  Speaker 1: declining since then. It's stabilized here over the last month
• 5:50
  Speaker 1: at around eighty bucks. It's very possible we could see
• 5:52
  Speaker 1: its IPO.
• 5:53
  Speaker 2: Rate around sixty eight bucks.
• 5:54
  Speaker 1: Reason being is there will be a lot less liquidity
• 5:58
  Speaker 1: and a lot less people looking at Circle. I think
• 6:00
  Speaker 1: in general, I want to play a clip for you
• 6:01
  Speaker 1: that kind of proves this.
• 6:02
  Speaker 2: Take a look.
• 6:03
  Speaker 4: Well, we were talking about this last hour. If Circle
• 6:06
  Speaker 4: is fundamentally a spread play on high interest rates and
• 6:09
  Speaker 4: the era of higher interest rates is ending, if they
• 6:11
  Speaker 4: lose one hundred million dollars in revenue every time the
• 6:14
  Speaker 4: Fed cuts rates by twenty five basis points, that's not
• 6:16
  Speaker 4: a great name. I mean that would explain why they're
• 6:18
  Speaker 4: back down towards their IPO price, would it not.
• 6:22
  Speaker 5: It's you know, if the business model is sensitive to rates,
• 6:25
  Speaker 5: it's sensitive to rates. If you're a nim net interest
• 6:27
  Speaker 5: margin model, then you are beholden to the rate curve. Tether,
• 6:30
  Speaker 5: on the other hand, you know, is an interesting model.
• 6:32
  Speaker 5: They retain a lot of that margin and then they
• 6:34
  Speaker 5: sort of reinvest it on their own balance sheets. So
• 6:37
  Speaker 5: there's many different models out there. You have things like Athena,
• 6:39
  Speaker 5: which you're actually in a stable coin that has a
• 6:42
  Speaker 5: basis trade that generates yields, so it's almost a utility
• 6:44
  Speaker 5: in the back end. But stables are a good business.
• 6:47
  Speaker 2: I'm sure you know.
• 6:47
  Speaker 1: Is that Circle right now shares their revenue with coinbase,
• 6:51
  Speaker 1: and that's a program that's been built really since the inception.
• 6:55
  Speaker 1: Because of the distribution that Coinbase has, Tether's on a
• 6:57
  Speaker 1: little bit of a different plane. They of course are
• 6:59
  Speaker 1: going into more gold, pitcoin things like that. I think
• 7:03
  Speaker 1: this is going to get very interesting over the next
• 7:06
  Speaker 1: few months and possibly over the next year of how
• 7:09
  Speaker 1: stable coins will play out. You may have some new
• 7:11
  Speaker 1: players that really get into They mentioned Athena is if
• 7:13
  Speaker 1: you look at algorithmic stable coins, Athena being one of them.
• 7:17
  Speaker 1: This is something that's being held by World Liberty five.
• 7:19
  Speaker 1: This could be where markets could vacate into a lot
• 7:23
  Speaker 1: of other tokens that could line up right here if
• 7:25
  Speaker 1: you look at what's going on with Ethereum, and if
• 7:28
  Speaker 1: you look at first movers, anytime you see a market
• 7:30
  Speaker 1: run within the all coins, it's going to be Ethereum.
• 7:33
  Speaker 1: This of course is looking at World Liberty Finance and
• 7:36
  Speaker 1: what their portfolio tokens are right now.
• 7:38
  Speaker 2: Eth is their top token.
• 7:40
  Speaker 1: Obviously you can see others in there, but I think
• 7:42
  Speaker 1: the problem will be a lot of people will be
• 7:43
  Speaker 1: a little bit confused and Ethereum will most likely be
• 7:47
  Speaker 1: on the front end of this in terms of a win.
• 7:50
  Speaker 1: All this plays into so many different scenarios. We looked
• 7:53
  Speaker 1: at this quite some time ago. This was a video
• 7:55
  Speaker 1: we did a year ago and it was a reference
• 7:57
  Speaker 1: to the Japanese stable coin and what Sonium was doing
• 8:01
  Speaker 1: and along with Sony. All this plays out right now
• 8:04
  Speaker 1: because Sony Blockchain now has partner with startel. This is
• 8:07
  Speaker 1: the launch of their new stable coin for Sonium and
• 8:10
  Speaker 1: the ecosystem. Remember the ecosystem as well. One other thing
• 8:13
  Speaker 1: to consider is how the yen may end up accelerating
• 8:17
  Speaker 1: its borrow rate to a very low percentage, which will
• 8:19
  Speaker 1: carry over that. This of course is in comparison to
• 8:22
  Speaker 1: what we're seeing right now in places like Ave where
• 8:24
  Speaker 1: you're seeing borrow rates at almost five and a half
• 8:27
  Speaker 1: percent coming in from Tether, four plus percent right there
• 8:30
  Speaker 1: on USDC and so on three percent on Rilust. Point
• 8:34
  Speaker 1: being is this will open up a lot of opportunity.
• 8:36
  Speaker 1: Now I want to go to a clip real quick
• 8:38
  Speaker 1: because this will break down a little bit more of
• 8:40
  Speaker 1: what soda. This of course is the lead over at
• 8:42
  Speaker 1: Sonium of why the yen could bring in a lot
• 8:46
  Speaker 1: of new money.
• 8:46
  Speaker 2: Take a look.
• 8:47
  Speaker 6: You can see it more as a super app. And
• 8:50
  Speaker 6: connected to this includes a Sonium A future as well.
• 8:53
  Speaker 6: The chain is well that to be in cooperating with
• 8:56
  Speaker 6: SBI as well those things.
• 8:58
  Speaker 7: One one more things on is we're pretty much focusing
• 9:02
  Speaker 7: on a stable cooin as well, which is the USD
• 9:05
  Speaker 7: In the Japanese end. We do have a strong advantage
• 9:09
  Speaker 7: in a JPR stable coin market because I'm a japaneseanda
• 9:14
  Speaker 7: and the JPR is the one of the most trusted
• 9:17
  Speaker 7: currency across the group recognized US one of the most
• 9:21
  Speaker 7: lowest borrowing rate currency in the market. In the long run,
• 9:25
  Speaker 7: maybe you can manage a tokenizer stock RWA and a
• 9:29
  Speaker 7: comporaata things such as gaming, music, movie and so on.
• 9:34
  Speaker 1: All Right, So what Soda was getting at there is
• 9:36
  Speaker 1: that basically it's going to make it very inexpensive to
• 9:39
  Speaker 1: get loans over there within their ecosystem. This will drive
• 9:42
  Speaker 1: liquidity into the market that will then escape into other
• 9:46
  Speaker 1: aspects of crypto in general. If you just look at
• 9:49
  Speaker 1: the Japanese component around digital lending and how fast it's grown,
• 9:53
  Speaker 1: this has been fantastic, and this is just the beginning.
• 9:56
  Speaker 1: So imagine what we see when really global liquidity starts
• 10:01
  Speaker 1: to hit the market, especially around the United States. Don't
• 10:04
  Speaker 1: forget this course, is what it looks like USDSEC out.
• 10:09
  Speaker 2: There on Sonium.
• 10:10
  Speaker 1: They've already started doing one thing, which is starting to
• 10:13
  Speaker 1: create this priority access is going to create rewards. This
• 10:16
  Speaker 1: of course gets people to engage. That is another factor.
• 10:20
  Speaker 1: Then you have all the banks that are now available
• 10:23
  Speaker 1: for the Sonium platform, and this of course starts to
• 10:26
  Speaker 1: really encroach on a lot of things. We reported on
• 10:28
  Speaker 1: this untitled bank some time ago, and.
• 10:31
  Speaker 2: I think was this rate here. This is kind of
• 10:34
  Speaker 2: gives you a connection into Morpho. Morpho.
• 10:36
  Speaker 1: Of course the United States lending arm I won't call
• 10:38
  Speaker 1: of coinbase, but that's one of the biggest partners, and
• 10:41
  Speaker 1: Morpho continues to climb up the charts in terms of
• 10:44
  Speaker 1: overall growth in lending. This is why all of this
• 10:48
  Speaker 1: matters because now you've got untitled blank bank also correlated
• 10:52
  Speaker 1: with Morpho, now correlated with low cost lending over on
• 10:56
  Speaker 1: the Sonium blockchain. Hence the end all that is where
• 10:59
  Speaker 1: it plugs in to liquidity injecting into the system. That's
• 11:02
  Speaker 1: the key around quantitative easing. That all this plays into.
• 11:06
  Speaker 1: The other thing you have that the Japanese are doing
• 11:09
  Speaker 1: is this tax reduction which will take effect in twenty
• 11:11
  Speaker 1: twenty seven, and it's going from fifty five percent this
• 11:14
  Speaker 1: is crypto tax, from fifty five percent to a max
• 11:17
  Speaker 1: of twenty percent. The amount of people in the Pacific
• 11:22
  Speaker 1: Asian area is going to be massive in terms of
• 11:25
  Speaker 1: where we can see trades coming into Japan just because
• 11:28
  Speaker 1: of the tax benefit that they're starting to move. Now,
• 11:31
  Speaker 1: will Trump do something like that for crypto, It's very
• 11:33
  Speaker 1: possible that he'll flank that. He's very friendly with the
• 11:36
  Speaker 1: Japanese Prime minister. But the Japanese have also finalized another
• 11:41
  Speaker 1: one hundred and seventeen billion in extra budget to fund
• 11:43
  Speaker 1: this stimulus. This, of course, simply starts to devalue the end,
• 11:47
  Speaker 1: which means could they be alternately moving to crypto much
• 11:52
  Speaker 1: faster simply saying well, we're just going to use the
• 11:55
  Speaker 1: end for interbank transfers, et cetera, and the real value
• 11:58
  Speaker 1: is going to be built around all of what's happening
• 12:01
  Speaker 1: in crypto. Take this into consideration. I'm looking at this
• 12:04
  Speaker 1: tweet right here. This is Blackrock simply saying, hey, another
• 12:07
  Speaker 1: twelve trillion. They say, US national debt will accelerate, and
• 12:11
  Speaker 1: the only thing that's going to adopt or basically solve
• 12:13
  Speaker 1: that is going to be crypto adoption. Now, imagine our
• 12:16
  Speaker 1: debt compared to the Japanese debt, which is gargantuan even
• 12:20
  Speaker 1: compared to our debt. If they think it's going to
• 12:23
  Speaker 1: accelerate here, imagine what it's going to do in Japan.
• 12:26
  Speaker 2: Again, back to a new.
• 12:27
  Speaker 1: Liquidity portal into the markets could be coming through the
• 12:31
  Speaker 1: Japanese markets. And this is a global community that has
• 12:34
  Speaker 1: been out there in the reverse carry trade for quite
• 12:37
  Speaker 1: some time, and this is pretty much what has propped
• 12:40
  Speaker 1: up US treasuries. The other thing that plays into this
• 12:43
  Speaker 1: is this is where it gets interesting because now you
• 12:44
  Speaker 1: have a lot of community bankers asking the OEC to
• 12:47
  Speaker 1: block Sony's crypto bank and everything that they're doing here,
• 12:50
  Speaker 1: So that tells you that they're concerned. A couple of
• 12:53
  Speaker 1: points in the article, the ICBA says Sony's bank charter
• 12:56
  Speaker 1: would let it issue deposit like stable coins outside traditional
• 12:59
  Speaker 1: bank banking rules, not a good thing. The group's concerns
• 13:02
  Speaker 1: over this trust group are overstated, and this of course
• 13:06
  Speaker 1: will be driven by big drink bank interests. Point being
• 13:09
  Speaker 1: is Sony's going to integrate this into a lot more
• 13:11
  Speaker 1: than just the economy. They're going to go also into
• 13:13
  Speaker 1: the gaming.
• 13:14
  Speaker 2: Side of it. We've talked about this before.
• 13:16
  Speaker 1: Nobody likes paying these credit card fees because that's one
• 13:19
  Speaker 1: of the other areas that are going to get hit.
• 13:21
  Speaker 1: Here's PlayStation talking about going crypto using the Sony stable coin.
• 13:25
  Speaker 2: This could be used for gaming.
• 13:27
  Speaker 1: This of course would completely dismantle what's going on in
• 13:31
  Speaker 1: the market around guess what that's right, credit card. It
• 13:35
  Speaker 1: would reduce payment fees often occurred in these platforms, So
• 13:39
  Speaker 1: again another big opportunity here to really shift into the
• 13:44
  Speaker 1: next phase of how crypto adoption is going to take place.
• 13:47
  Speaker 1: You take all of that and then you apply this
• 13:50
  Speaker 1: to the Clarity Act and whether or not the Clarity
• 13:53
  Speaker 1: Act is going to be a catalyst for crypto in general.
• 13:56
  Speaker 1: We put out a poll simply asking what would it
• 13:58
  Speaker 1: help more bitcoin orypto in general. Crypto in general was
• 14:02
  Speaker 1: pretty much the winner, hands down. That's the point we're
• 14:04
  Speaker 1: getting at here is watching these early liquidity moves, looking
• 14:08
  Speaker 1: at the global macro of what's happening around the world,
• 14:11
  Speaker 1: Where is that money going to come from, how is
• 14:14
  Speaker 1: stable going is going to be evolved, and where the
• 14:16
  Speaker 1: FED is going to start pulling the trigger and begin
• 14:19
  Speaker 1: quantitative easing. We believe it's somewhere in the early parts
• 14:23
  Speaker 1: of twenty twenty six.
• 14:24
  Speaker 2: Watch very closely.
• 14:25
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