Digital Asset News host analyzes rising CPI inflation, rate hike odds, and a bearish Bitcoin outlook
A solo commentary episode from the Digital Asset News channel discussing April CPI data, the Fed's new chair, and why several prominent figures are turning bearish on Bitcoin.
Summary
The Digital Asset News host breaks down April's CPI inflation print, which came in at 3.8% year-over-year — the highest since May 2023 — and above expectations, driven largely by energy and geopolitical factors. He discusses the implications for Federal Reserve rate policy under incoming chair Kevin Warsh, whose Senate confirmation for the board has occurred but whose chairmanship vote is described as still pending. Warsh has signaled he may look through one-off inflation shocks from tariffs and oil prices, and believes AI-driven productivity gains could be disinflationary, potentially enabling rate cuts rather than hikes. The host then presents a bearish case for Bitcoin in the near term, citing Ray Dalio's recent skepticism (including concerns about Bitcoin's lack of transaction privacy, its correlation with tech stocks, questions around quantum computing, and its small market cap relative to gold), Michael Turpin's active short position targeting a drop toward the $60,000–$50,000 range, and Michael Burry's warning of an impending traditional market crash. The host also notes Bitcoin's position relative to long-term moving averages and the historical pattern of price degradation within four-year cycles. He closes with a live Q&A session responding to viewer comments on these themes.
Key Takeaways
FULL TRANSCRIPT
April CPI Data Breaks Above Expectations
Host: It looks like inflation is up, and that means rate hikes are potentially on the menu. But maybe it won't be as bad as we think — and it really all comes down to geopolitics.
What I'm talking about today just broke a couple of hours ago. April's CPI inflation has risen to 3.8%, the highest level since May of 2023. Core CPI also came in at 2.8%, above expectations of 2.7%. As long as I've been doing this, I was never particularly concerned with inflation ten or twenty years ago. But the most important thing now is expectations — can we temper those expectations? Can we hit the goals? Are we above them or below? And it looks like inflation is rising quite high. We're experiencing post-pandemic inflation.
As stated in the coalition letter, the odds of Fed rate hikes are surging. If we take a look at MarketWatch, the CPI did indeed hit notable levels. The previous monthly reading was 0.9%, the expectation was 0.6%, and we came in at 0.6%. The problem is CPI year-over-year. We knew it was going to go up, and the reason we knew that is what Truflation has been indicating.
Geopolitics and Oil as the Primary Inflation Driver
Host: The official surprise is that almost entirely, the inflation is energy-driven — oil and geopolitics. So if you're into TA, which in this case is Trump Analysis, all you have to do is watch Truth Social and watch as he points out, "We've got a peace treaty. Okay, now we don't. Now we do. Now we don't. Now we're going to do a blockade. Now we're not." That's pretty much going to be back and forth for quite some time.
As far as inflation goes, it really is geopolitical issues and oil. Core CPI, which is what the Fed is specifically looking at — last time we assessed this, the expectation was 0.3% and we came in at 0.4%. The core CPI year-over-year was expected at 2.7% and unfortunately we are at 2.8%.
Kevin Warsh and the New Fed Direction
Host: I found it interesting that despite the big push higher in inflation, the suggestion is that we may be raising rates — but maybe not. If we take a look at the CME Group, where everybody is watching to see if rates actually move, the current target range is 350 to 375 basis points. For the next meeting on June 17th, there is a 97.6% probability it stays exactly the same. However, as the day goes on, you might see more fluctuations in those odds.
It really all comes down to Kevin Warsh. Warsh was just confirmed by the Senate for his seat on the Fed board. There is one more vote scheduled for tomorrow, which looks like it may be ceremonial. It appears he is going to be our new Federal Reserve chair as Jerome Powell steps down, though Powell will remain on the board itself.
It really comes down to what Warsh actually believes. When you hear about this inflation data, you're going to see a lot of people say, "That's going to be bad — if inflation goes up, we raise rates, and raising rates is not good for risk-on assets. That's great for risk-off assets, and because of that our markets are going to see a big sell-off."
However, it really comes down to Warsh, who previously served on the Fed board and had a very hawkish reputation on inflation following his resignation from the central bank's board in 2011. Now, roughly fifteen years later, he gets to come back. He recently suggested, though, that central bankers could look through one-off shocks from tariffs and rising oil prices and geopolitical issues. He also suggested that gains in productivity from the adoption of AI will provide disinflationary pressure, which can enable policymakers to lower rates.
What he specifically said was that the Federal Reserve was looking at data that was six, eight, and one year back. If they were able to look forward, they wouldn't have been talking about raising rates or keeping them the same — he said they would have actually cut rates, especially given what he describes as AI, geopolitical, and oil risks. So as we move forward, just know that it could go either way.
Ray Dalio on Bitcoin's Limitations
Host: It's not all good news. This is from an online podcast featuring Ray Dalio — one of the financial legends out there. He was very anti-Bitcoin, then got on the train, and now has recently jumped off. This is why he is jumping off. And it's not just Ray Dalio — there are a couple of other big heavyweights moving in the same direction. It looks like there's going to be a sell-off. Let's hear what Mr. Dalio has to say.
The interviewer asked:
Interviewer: "Gold has climbed 80% since we last talked. Bitcoin's down 25%. What's your view on what's happened with Bitcoin, and why it hasn't played the role that many thought it was going to play — which is the safe-haven asset?"
Ray Dalio: "There are important differentiating characteristics of Bitcoin. Bitcoin does not have privacy. Transactions can be monitored and then indirectly perhaps controlled. Central banks are not going to want to buy Bitcoin and hold it. So it's not just individuals — it's institutions and central banks as well. There has been some question about the development of new technologies like quantum computing. Can there be issues regarding that? And then there's who owns it and what are the other exposures they have in their portfolio. It tends to have a pretty high correlation with tech stocks. So from an ownership standpoint, the supply and demand is affected when somebody gets squeezed in one thing and sells whatever else they have. So there are those dynamics. It's a relatively small market — a relatively controllable market. I think a lot of attention has been given to Bitcoin, but as a money, it's small in relationship to gold. There is only one gold."
Host: And you know what — he's right. There is only one gold. And what he said about market cap is also correct. Bitcoin's market cap is roughly $1.6 trillion, the entire crypto market cap is roughly $2.7 trillion. Compared to gold, it is dwarfed. However, is that the end-all be-all? Is that what Ray is saying?
It's very funny, because Elizabeth Warren has railed against crypto and digital assets for quite some time, as have people like Ben McKenzie, saying that crypto is all done with illicit activity, that you can't track it, that it's the worst thing of all time. And yet here Ray Dalio is telling the exact opposite story — that everything is public and trackable. I'll let you decipher that and put your thoughts in the comments.
Michael Turpin Shorting Bitcoin; Michael Burry's Warning
Host: It's not just Ray Dalio who's seeing problems. Michael Turpin — who has been around since 2012 and 2013 and has been a big Bitcoin bull — says his fund is shorting Bitcoin right now, betting on one more move lower before a bigger recovery. That's the camp I'm in as well. I could be wrong — I've been wrong many times before. I still buy Bitcoin every single Monday on the Cash App. However, I do think there's a leg down, and Turpin and I see eye to eye on that.
He says Bitcoin is hitting a million by 2033 — that's his long-term price prediction. But he says Bitcoin could first drop from the $80,000 range toward the $60,000 to even $50,000 range.
And then there's Michael Burry. He's been predicting an economic crash since 2015. He states that traditional markets are about to crash, saying all of it is the scene of a bloody car crash in the minutes before it happens. I want to throw Michael in there because he's a legend, but he's been wrong quite a lot and has been something of a chicken little in traditional finance. Maybe he gets it right this time. We'll see.
Bitcoin's Long-Term Moving Averages and the Four-Year Cycle
Host: My last thoughts are these. I still think we've got ways to go down. I still see more pain. I still believe in the four-year cycles.
Take a look at the moving averages. The last time we assessed the 200-week moving average it was at $61,000. I want to show you the 250-week and the 300-week. In the last cycle, we had a nice little run-up in June 2019, then again around June 2020, and then we saw it actually hit down to the 300-week and 250-week moving averages at around $3,800.
The last time we actually saw Bitcoin go below the 300-week moving average — which we thought it would never do after 2021 — it still did it. It went below the 300-week and I think it actually even hit the 350-week moving average, which was roughly at $15,700.
Currently we are sitting above all those levels. Now, does this mean we have to go there? I'm not saying it is. I'm just saying that usually over the four-year time frame, we start to see more degradation — especially with the geopolitical issues around oil, the inflation talk, the OGs selling their large crypto positions, and the fact that crypto is increasingly becoming just another asset class within traditional finance. I could see things going a little bit lower.
And lastly, even Ivan on Tech's bull-mania money line is still showing bearish — it has not flipped bullish — even though a few assets like Tron have done a great job, up around 8%, along with Zcash and a handful of others that have performed well.
Live Q&A with Viewers
Host: Let's get into a little Q&A and answer your questions.
Someone says timing the market is trading 101. No — I'm not a great timer of the market. And this is why I always talk about this: people say, "Rob, you're just telling me to wait until it crashes and then buy it." I mean, that'd be nice. But what I'm trying to say is, for me, it only makes sense to have two outcomes. I'm going to keep buying every Monday and I'm going to use those risk levels. If you don't know what I'm talking about, there's a link in the description where I talk about dynamic DCA with risk levels. As the price goes down, I actually increase my buys. Below the 0.5 risk level, I buy the same amount. Below 0.4, I double up. Below 0.3, I quadruple up. And below 0.2, I'm doing almost an 8x of buying. Is that going to be sustainable? It depends. But what if I'm wrong? What if we just keep going down? Well, great news — I haven't spent all my money. As we start to hit those moving averages, maybe I start to buy a little bit more, especially as we get into those risk levels. Either we go down and I keep buying, or we wait for it to go down and pick up some fantastic buys.
But the third option is maybe it doesn't go down. How many of you thought we were going to go from Bitcoin to altcoin season, large cap to small cap altcoin season? That didn't happen. How many of you thought we were going to keep going in Q4 of 2025? Because that's usually what happens — November or December, we've got the President of the United States behind it, the economy is doing relatively well, traditional finance is doing fantastic, the S&P 500 is up, and the Voyager, Celsius, BlockFi, and FTX situations are gone. It should have worked pretty well. And look what happened. So I'm just hedging my bet and going from that position.
Someone says, "Of course he's going to talk about something he holds and try to sell it to retail." Yeah, I do the same thing. Have you heard me talk about Amazon stock on this channel? I'm not talking about things I don't own. I talk about the things I own because I believe in them. And if I didn't buy it, it's because I didn't believe in it. Hopefully over time we'll all be proven right.
Jimmy says, "I love the quote about Michael Burry — he's correctly called 47 of the last three market corrections." You know what's funny? He only has to be right once, or in this case twice or three times, and that's what people will remember. The victors write history. When they look back, Michael Burry will be like my mom — she'd always say, "You're going to get in a car accident. Stop looking at your phone. You're going to get in a car accident." Twenty years later I get a fender bender and she says, "See? I told you." Of course she did.
Someone says they prefer the 199-week moving average. Lone Wolf says, "Ray, that's okay — Bitcoin is just the first wave of what blockchain tech is going to bring to the world." You know, Ray Dalio is a smart guy, but I don't know how long he has been talking about how China is going to be the superpower of the world. I was on GemJam Crypto's show today — she's out of Hong Kong — and the things she tells me about China give an air of strength and a massive amount of confidence. I'm not a geopolitical expert. I just listen to the people who are over there. But just look at their real estate market. The majority of their retirees put money into real estate projects that are now ghost towns. How do you deal with that? Ray Dalio still thinks China is going to be the next superpower. Let's see in a hundred years, right? Maybe. I'm just worried about what's going on right now.
Someone says, "That's the most coherent he's been in a while. Sadly, his best days are behind him." Either we're talking about Dalio or Michael Burry — I wish them both well, but I'm not taking financial advice from either of them right now.
Someone says, "One more correction — I'm okay with that." Another says, "Ray Dalio has become an old fuddy-duddy." There's nothing wrong with being old, or a fuddy, or a duddy.
Someone says, "The only echo I hear is my wife telling me to stop believing in Bitcoin." Exactly. You know, if you want some really good advice, just do what my dog does — you can barely see her, she's just sleeping as usual. That's how you should deal with the negative nancies out there.
Someone says, "China is building infrastructure for other countries though." So are we. Ghost cities — yeah.
Someone mentions Arthur Hayes pumping Zcash. Arthur Hayes — they call him a billionaire. I'm surprised he has that much, but he made a lot of money in crypto. And all of a sudden Zcash came out of nowhere and everybody seems to love it. A lot of rich people do, I'll tell you that.
Perry says, "It happened, but the numbers aren't what people were expecting." Very true.
So, two different options and two different routes going forward. If you're really adept at Trump Analysis, just watch Truth Social. As soon as Trump says anything about a peace deal, a peace treaty, removing blockades, dealing with the Iranians, or opening the Strait of Hormuz — that's your signal. That's the real TA.