The Wolf Den #1184 - My Honest Thoughts On The Recession Rumblings
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In This Issue:
My Honest Thoughts On The Recession Rumblings
Bitcoin Thoughts And Analysis
Altcoin Charts
Legacy Markets
Are States Still Interested In Bitcoin?
Gold Is The Canary In The Coal Mine
Mantra Releases An Update To The Public
Crypto Companies Are Seeking Banking Licenses
Strategy Keeps Buying Bitcoin
Bitcoin To $92K, Gold Breaks Out, Dollar COLLAPSING | Macro Monday
My Honest Thoughts On The Recession Rumblings
Pop Quiz!
The U.S. economy has been in a recession for _____ out of the past 15 years and 10 months?
A. 2 years, 6 months
B. 0 years, 2 months
C. 5 years, 4 months
D. 1 year, 2 months
Don’t cheat. Think for a minute if you have to.
The answer – hopefully you didn’t cheat – is the second letter of the alphabet.
The National Bureau of Economic Research (NBER) officially dates the Global Financial Crisis from December 2007 to June 2009 – a total of 18 months. Since then, it’s been 15 years and 10 months, and in that entire stretch, the U.S. economy has only spent two months in a recession.
Those two months? During COVID – a brief contraction between February and April 2020, marking one of the shortest recessions in U.S. history.
Below is a snapshot from the National Bureau of Economic Research (NBER), “US Business Cycle Expansions and Contractions,” along with this concise summary:
“Recessions – contractions in economic activity – start in the month after a peak in the business cycle, and end in the month of the trough.”
The columns from left to right are:
Peak Month (Peak Quarter), Trough Month (Trough Quarter), Duration peak to trough, Duration trough to peak, Duration trough to trough, and Duration peak to peak.
For our purposes, the key figure is the 2 in the bottom row, representing the official length of the COVID recession (from peak to trough). Now compare that 2 with the durations of other recessions dating back to 1969.
Historically speaking, two months is barely a blip in recessionary terms. It’s also remarkable that over the past 15 years and 10 months, the U.S. economy has only spent those two months in a recession. On average, recessions typically last anywhere from 6 to 18 months and tend to occur every 5 to 7 years.
The past decade has had its ups and downs, but investors from the GFC to today have been remarkably fortunate – there’s no other way to put it. Bear markets help even the playing field a bit, but not by much. According to Hartford Funds, “There have been 27 bear markets in the S&P 500 Index since 1928. However, there have also been 28 bull markets — and stocks have risen significantly over the long term.”
I dug a little deeper: there have been 15 recessions since 1928.
Since the Global Financial Crisis, we’ve seen three bear markets:
2011 Bear Market – Sparked by fears of a European debt crisis and a U.S. credit downgrade.
2020 Bear Market – Triggered by the onset of COVID-19.
2022 Bear Market – Driven by inflation fears, aggressive interest rate hikes, and looming concerns of an economic slowdown.
If you look closely at the right-hand side of the image above, you'll see the pattern: an 11-year bull market, followed by a 1.8-year run, and then a 2.5-year stretch. Despite a few corrections, we still haven’t truly paid the price for the excesses built up over the past 15 years.
So the real question is this: have we entered a new era where recessions and bear markets are shorter, rarer, and more easily controlled – thanks to modern monetary and fiscal tools? Or are we just kicking the can down the road and setting ourselves up for something much bigger?
I’m not in the business of predicting recessions or timing bear markets – but by several measures, we’re already flirting with both. According to Polymarket bettors, the dry streak could end this year.
Of all the years I’ve spent following the market, it’s still hard to accept the idea that the modern era is simply different – that we’ll have fewer recessions, and when they do come, they’ll be milder. Regardless, all of this adds up to an interesting thought exercise – not something I plan to take action on.
We also don’t really know what to expect from Bitcoin if things truly go off the rails. Over the past couple of months, Bitcoin investors have had good reason to feel content compared to major indexes and individual equities. But during the last recession – the COVID crash – Bitcoin took a nosedive. Historically, it’s tended to follow the broader market when real bear trends take hold.
I’m in no position to give financial advice – and none of this should be taken as such – but if you’re an older investor who tends to worry about potential risks lurking beneath the surface, it might make sense to explore de-risking into bonds as a core part of your portfolio. On the other hand, if you’re not nearing retirement, I believe moving into Bitcoin is the single most compelling opportunity across all financial markets.
Buying gold while it’s hitting all-time highs week after week feels poorly timed. Real estate as an investment is a toss-up and unlikely to outperform the S&P 500 long term. And while equities are currently trading at a discount, I struggle to see how major names like NVIDIA, Tesla, Apple, Microsoft – or any other tech stock – outpace Bitcoin over the next 3 to 5 years.
Allocating 1% or 2% of your portfolio to Bitcoin is certainly better than nothing – but even if Bitcoin delivers massive outperformance, a position that small isn’t going to move the needle. The needle begins to move around the 5% to 10% range, where meaningful gains can start to have a noticeable impact on your overall portfolio performance, especially in the event of a major Bitcoin rally.
I digress, but the moral of the story is this: don’t get too caught up in recession fears. Be thankful that if it has already begun, we’re likely already a good portion of the way through it. There were countless doom-and-gloom headlines in 2022 and 2023, yet nothing materialized.
“Top Wall Street CEOs Amplify Recession Warnings as Bets of Dismal 2023 Swell”
“US May Already Be in Recession”
“Chief Economists Say Global Recession Likely in 2023”
If the modern era truly is different, then the stage is set for Bitcoin to thrive. And if it’s not different, I still want to be holding Bitcoin when sh*t hits the fan.
Buy Bitcoin and opt out – it’s that simple.
Bitcoin Thoughts And Analysis
Bitcoin is really knocking on the door of major resistance here, testing the key level at $88,804 for the second day in a row. What makes this even more notable is the backdrop – equities have been under pressure, yet Bitcoin is showing strong divergence and relative strength.
We saw a breakout through descending resistance yesterday, backed by a meaningful increase in volume – a solid signal that buyers are stepping up. Price is comfortably holding above the 50-day moving average, and the 200-day MA is now flattening out just below resistance, giving bulls a potential momentum shift.
A daily close above $88,804 would break the bearish market structure with a higher high and open the door to a more extended move. For now, this is an encouraging chart.
Altcoin Charts
BITCOIN DOMINANCE
This cycle is very different. In past cycles, dominance shifted as crypto natives rotated between Bitcoin and altcoins – the old money-washing machine. This time, new money is flowing into Bitcoin from retail, institutions, and even governments – and it’s not trickling down to altcoins. It can't go from an ETF into a meme. Altcoins are bleeding against BTC because holders are selling to pay bills – not to rotate into Bitcoin. That’s capitulation. And Bitcoiners? They’re not selling BTC to buy altcoins. Probably ever. Altcoins need an outside bid. For now, you have to be VERY selective about the altcoins you choose.
Gold Hits $3,500 As U.S. Stock Futures Rebound: Markets Wrap
US stock futures rebounded Tuesday, with S&P 500 contracts up 0.9%, as traders watched for developments in US-India trade talks and braced for Tesla’s earnings report after market close. Meanwhile, gold surged past $3,500 for the first time before paring gains, extending a 33% rally in 2025 fueled by trade tensions and eroding confidence in dollar assets.
Despite the bounce, market sentiment remained fragile amid speculation that President Donald Trump may attempt to fire Federal Reserve Chair Jerome Powell. The dollar and Treasuries held steady, while the yen strengthened beyond 140 per dollar as haven flows increased and the Bank of Japan maintained a hawkish stance.
In Europe, stocks slipped slightly, with Novo Nordisk tumbling nearly 10% on concerns about competition from Eli Lilly’s experimental weight-loss pill. Tesla shares, already down 44% this year, continued to face pressure as analysts flagged a “code red” moment ahead of its earnings release.
Elsewhere, the US touted “significant progress” in trade negotiations with India, which faces steep tariffs unless a deal is struck during the 90-day pause Trump announced on April 2. Uncertainty around US trade and Fed policy continues to drive demand for safe-haven assets, pushing central banks and investors into gold and away from traditional US securities.
Stocks
S&P 500 futures rose 0.9% as of 6:27 a.m. New York time
Nasdaq 100 futures rose 0.9%
Futures on the Dow Jones Industrial Average rose 0.8%
The Stoxx Europe 600 fell 0.4%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.1495
The British pound was little changed at $1.3370
The Japanese yen rose 0.4% to 140.24 per dollar
Cryptocurrencies
Bitcoin rose 1.1% to $88,336.12
Ether rose 2.4% to $1,614.71
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.42%
Germany’s 10-year yield declined two basis points to 2.45%
Britain’s 10-year yield was little changed at 4.57%
Commodities
West Texas Intermediate crude rose 1.7% to $64.14 a barrel
Spot gold rose 1% to $3,456.97 an ounce
Are States Still Interested In Bitcoin?
The excitement around the State Reserve Race narrative has come to a screeching halt – and it’s unclear whether that’s due to Bitcoin’s decline, a few state-level setbacks, or simply waning outside interest. Regardless, several states are still making progress with Bitcoin – and some are edging close to the finish line.
Part of the initial problem was the early overhype – as states began coming online, the U.S. map lit up orange, creating the illusion of rapid progress. But introducing a bill is a far cry from enacting one. A typical state bill moves through several stages: drafting, introduction, committee review, floor votes, reconciliation (if needed), and finally, the governor’s signature. At any point in the process, a bill can be amended, delayed, sent back for revision, or struck down entirely – making the path from proposal to law far less certain than it might initially appear.
I'm still very bullish on states eventually enacting their own Bitcoin laws – but it will take time, vary from state to state, and likely accelerate once one successfully leads the way. It’s easy to get swept up in the narrative. Don’t fall into that trap – just stay informed on what’s actually happening and keep your expectations in check.
Gold Is The Canary In The Coal Mine
Of all the assets in the chart above, which one logically stands to follow gold – and maybe even surpass it in gains – over the next 6 to 12 months? The dollar? LOL, no. The Dow or S&P 500? Not likely. Crude oil? Unlikely. Bitcoin? Probably yes. Bitcoin is the only asset that’s kept pace with gold over the past year yet still has room to run. At this rate, if the dollar continues to slide and major indexes keep bleeding, there’s a real chance we see gold cross $3,400 an ounce by week’s end. Looking ahead 6 to 12 months, I can see Bitcoin performing well in either scenario – whether we enter a recession with gold leading, or major indexes rebound and risk assets surge.
Bitcoin is a win–win asset to hold.
Mantra Releases An Update To The Public
The total OM supply stands at 1.81 billion tokens. As per the new update, “CEO and Founder, John Patrick Mullin is burning his 150 million allocation of team tokens.” This announcement follows the commitment made last week in response to the recent downward price action. Additionally, it was stated, “MANTRA is in ongoing conversations with key ecosystem partners to implement an additional 150 million OM token burn, which will bring the total burn amount to 300 million OM. After unbonding, MANTRA Chain will burn 150 million OM, reducing the total supply from 1.82 billion OM to 1.67 billion OM while decreasing staked tokens from 571.8 million OM to 421.8 million OM.”
Crypto Companies Are Seeking Banking Licenses
Several major crypto firms – including Circle, BitGo, Coinbase, and Paxos – are reportedly weighing applications for U.S. banking licenses. The move comes as regulators continue to refine stablecoin policy, and industry players look to align more closely with the traditional financial system.
Paxos already received preliminary approval for a bank charter back in 2021, and now others may follow, according to a WSJ report citing sources familiar with the matter. The shift aligns with recent remarks from Fed Chair Jerome Powell, who said that while crypto has had its issues, stablecoins show real consumer promise and should be governed under a proper legal framework.
A bank charter would give these companies far greater operational flexibility – allowing them to accept deposits, make loans, and function more like traditional financial institutions.
Strategy Keeps Buying Bitcoin
Strategy has purchased Bitcoin on five of the past six Mondays – sometimes in smaller amounts, but always with steady consistency. What remains to be seen is how MSTR, STRK, and STRF begin to synergize once those stocks start gaining upward momentum. I still think there’s a real chance Strategy could top its largest purchase to date: 55,500 BTC at $97,862 on November 25, 2024.
Bitcoin To $92K, Gold Breaks Out, Dollar COLLAPSING | Macro Monday
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.