Macro U-turn to make Ethereum run massively hard, says CEO of Crypto Hedge Fund
The chief investment officer of Ikigai Asset Management highlights a key event needed to potentially trigger a rally in cryptocurrencies.
In an interview with the Bankless podcast, Ikigai co-founder Travis Kling says that beyond the US Federal Reserve’s policies that risk sending the economy into recession, it is the ongoing conflict between Russia and Ukraine that ultimately needs to be resolved in order to get the macroeconomic picture. to stabilize.
“If you can get some sort of credible treaty there, it will bring this set of commodity prices down — they’ve already come off a lot from the high — but commodity prices down, expectations tightening down, inflation expectations down, stocks up, crypto up.”
Kling believes that the leading smart contract platform Ethereum (ETH) will greatly benefit from the geopolitical and economic situation improving.
“That would be the backdrop for crypto in general and ETH specifically to run tremendously hard if everything of that sort lines up and you end up threading the needle there.
I’m not saying it’s definitely going to happen, but I think that’s the setup.”
The hedge fund manager then discusses Bitcoin (BTC), saying that the top crypto asset by market capitalization represents much more than being a hedge against short-term swings in the consumer price index (CPI).
“You will never find me publicly anywhere saying that Bitcoin was like a CPI inflation hedge [or] a monetary inflation hedge.
It is a non-sovereign, hard-cap supply, global, immutable, decentralized digital store of value. I’ve rattled it off about 5,000 times at this point.
It is a safeguard against irresponsibility from central banks and governments globally.”
Kling concludes his analysis by comparing how Bitcoin reacts to quantitative easing (QE) versus quantitative tightening (QT). In cases of QE, central banks keep interest rates low and increase the money supply, while under QT, interest rates go up and supply contracts.
“[Bitcoin] love QE and loathe QT. We are in a QT cycle right now, but I have a high degree of confidence that it is very temporary. The market is telling you that it is temporary and that it is closer to being done than to begin.
It goes back to my point about going fastest from the bottom. I think that speaks to Paul Tudor Jones’ moniker that Bitcoin is the fastest horse.”
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