All the cool kids are talking about inflation, Fed rate hikes, and a stretched money and credit cycle that obviously spells "bear market." Facebook collapsing 26% last Thursday and bitcoin spiraling down 40% recently just confirmed the obvious.
Then...well, bitcoin has since rallied 30%+ and this last week has seen over $1 billion of crypto venture deals in just the few projects I'm tracking.
- Secret Network announces $400 million for an ecosystem fund and an accelerator (HINT: Expect a lot more investment)
- Aleo $200 million in a Series B for privacy-preserving DeFi
- Polygon clocks a $450 million bet led by Sequoia
Again, these are some of the guys I'm tracking. I'm sure there are many more.
Will the real macroeconomics fans please stand up? Remember the Taylor Rule? I just listed to John Taylor on EconTalk, where he discusses inflation, rates, and what he thinks the Fed should be doing right now.
Long story short: even with the Fed's "aggressive" multiple rate hikes planned throughout the year, we're only looking at a Fed funds rate target of 0.9%. That's still way under "normal" and way under the 5% to 6% Taylor thinks would be rational given inflation, GDP growth, and 2% inflation targeting.
I'm as concerned as the next guy about a shifting monetary regime, but thus far it's way too early to think we're in a bear market. We're literally still in a bull market, and with so much capital being raised by major blockchains, that elusive bear seems further than the scary financial headlines would have us think.