Erik Weijers, a month ago
Stanley Druckenmiller is a soft-spoken, elderly multi-billionaire investor. When he gives his opinion, financial advisors listen. As a macro investor, Druckenmiller doesn't day trade, but views things on a multi-year timeframe. It is his opinion that we might be in for a decade-long sideways market for stocks. But how about crypto?
It's refreshing to sometimes glance at the 100 year timeframe of the stock market. Just to remind ourselves that stock prices don't always go up. Between the mid sixties and the early eighties, for example, they were rather flat.
Log scale of the Dow Jones index. Note the flat period in the 60's and 70's
Why does Druckenmiller think we might be in for a similar period?
Druckenmiller isn't alone in his analysis. A lot of macro thought leaders share this view. Still, there are opposing views. Against all of the above points one could make a counter argument.
The point of innovation brings us to crypto. In recent months, crypto is highly correlated to stocks. Because of a lack of liquidity (fancy word for money floating around in financial markets), prices of everything went down. But this correlation has come on gone in the past. If/when crypto decouples again, crypto prices could well rise again.
Crypto developers are building like never before. Adoption is happening left and right. Unless something like a US government ban is enforced, it is hard to image that crypto will be in a decade long flat market. The rate at which people build and start using this tech, goes just to fast. That might make crypto exactly the sector that people and institutions will flee too, if stock markets indeed will prove to stay flat.
Side note: the 69-year-old, statesman-like Druckenmiller bought Bitcoin in 2020, as one of the first highly respected investors. That's one reason we take his opinions extra seriously!
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