6342 Bitcoin vs War and AI!

Hey, everybody, this is Femall and you can free domain Bitcoin down.

This is late March 2026 at sliding and it's not some isolated to crypto drama.

It's of course, bigger stuff that's going up and down in the entire financial world.

So Bitcoin is down, I guess more than 20% or so for the year so far.

It's a long way down from the peak above 125,000 usd back in October of 2025.

Now, of course, if you've been around the space for a while, you know this asset often rides waves of optimism and terror.

Fear is winning at the moment and the reasons go well beyond the usual headlines about whales or tweets or diamond or paper hands and so on.

Of course, the spark for this latest drop is geopolitical tension in the Middle East.

In early March, the United States and Israel launched a major,

what would launch major strikes on Iran, part of what's on called Operation Epic Fury.

It retaliatory moves followed, even though there are now talks of de-escalation, the uncertainty lingers.

That pushed oil prices higher because, of course, everybody worries about the supplied disruption through key routes like the state of hormones.

Higher oil, of course, higher oil costs feed straight into inflation fears in the US.

When inflation looks sticky, investors assume the Fed

will keep interest rates higher for longer instead of cutting them aggressively higher rates, of course,

make borrowing more expensive for businesses and consumers, which cools economic growth and makes risky investments.

IE, stocks or Bitcoin less attractive.

Now, Bitcoin has been moving dosido almost in lockstep at the broader stock market lately.

It's price correlation with the S&P has climbed to some of the highest levels we've seen this year.

Of course, this means when stocks sell off on bad news, Bitcoin tends to follow.

Right now, of course, stocks run to pressure from the same cocktail of oil, spikes, inflation worries and caution.

Tech shares in particular have taken hits after some softer earnings reports that dented the AI hype narrative.

Investors are rotating ahead of high-growth high-risk bets and into more defensive areas.

And yes, of course, this is something that always comes along with war.

There is a stampede towards defense stocks, companies have built weapons systems,

fighter jets, missiles and military technology has seen a shop gains names like Lockheed Martin, RTX used to be called Raytheon,

Northrop, Grumman, jumped several percent in single trading sessions back in early March when the conflict news hit.

Their stocks hit fresh yearly highs because the market expects government to ramp up military spending.

If and guy now assume when one to two years, at least, tensions drag on.

In the world of uncertainty, these feel like direct beneficiaries rather than pure risk assets.

It's a classic flight to sectors that thrive when the world heats up with the weapons of war.

Other big market-movers are piling on the pressure for Bitcoin specifically.

Spot Bitcoin, exchange traded funds, those easy to buy baskets,

traditional investors get exposure without only the coins directly have seen billions of dollars

flow out since late last year. Institutions are piled in during the 2025 buildrunner now selling

or at least stepping back. That creates his self-reinforcing loop, selling drives prices lower,

which triggers more selling. We've also seen forced liquidations where leverage traders get

automatically unwound when prices drop by certain levels and recent options,

explorations at an extra spicy volatility. On top of that, there's the, feels like almost

omnipresent regulatory fog. A key bill called the Clarity Act was supposed to set clear rules for

crypto trading and decide which digital assets counter securities. It's now stalled

in Congress partly because of a controversial provision that would limit yields on stablecoins.

Those are the dollar-picked tokens meant to be the steady backbone of the crypto world.

Without clear pro crypto rules, some big money players are hitting pause.

So if you put all this together, Bitcoin is behaving exactly like what it has become.

In 2026, a high beta risk asset that amplifies whatever the stock market is doing.

Gold and silver, which sometimes act as safe havens, have been volatile as well.

Racing to records, then crashing, which only added to the risk off mood.

Treasury yields are climbing towards yearly highs, signaling those

higher for longer rate expectations, and weekend trading liquidity is always thin,

so moves get exaggerated. None of this, of course, in my personal opinion,

is permanent doom and gloom. Remember, I'm just in amateur. None of this is trading advice.

Do your own research make your own decisions?

Markets turn, tensions can cool, and rate expectations can shift.

But right now, the slide of Bitcoin reflects a broader story.

Investors are nervous about inflation, geopolitics, and the pace of economic growth.

So they're selling what feels risky, and buying what feels protected or directly tied to conflict.

Defense stocks are one clear winner, sadly, in that rotation.

If the Middle East headlines improve, and the Fed signals any dovish tilt,

we could see a rebound, but now, though, the forces at play are macroeconomic and geopolitical,

not just crypto-specific noise.

Keep that in mind as you watch the charts.

And you know when stuff's going down, I just expect it to go down enormously,

and that's if it only goes down a little bit, I'm happy.

I would also say that in the economy as a whole, there is a big, big uncertainty,

which is, and I had the sort of reminds me of the 90s, with pets.com and the internet bubble.

And there's a big question, which is, is the AI hype going to pan out?

Companies are going to make a lot more money if they can replace people with AI.

Unfortunately, moving from a raw meritocracy towards politically-based hiring or a

quoted-based hiring has, I mean, it's a very sad and very tragic, but what it's done is it

has exposed a lot of people to market corrections in those hiring practices. In other words,

if you have hired people not based upon meritocracy, it is far more economically attractive to replace

them with AI. Is AI going to pan out? Is it going to pay out? You hear a lot back and forth.

Some people say it's the greatest thing since sliced bread. Other people say it's a giant waste

of time, effort, and energy. And the misallocation of resources there in us based on hype is a

consistent pattern in the economy as a whole. Stuff gets hyped up. People go nuts, especially

people who don't really know what's going on and it's really hard for any individual investor

or group of investors to know what's going on with AI. Is it hype? Is it real? Is it not?

There's no, it's impenetrable, right? They just have to rely on reports. If those reports

seem good, in other words, if people are firing people, people are firing employees,

if managers are firing employees based on productivity of AI, then those companies that do that

first, if AI pans out, will go up enormously in value. If companies are firing employees based

upon the hype of AI, and it turns out that AI is not as productive as is expected, then those

companies are going to be crippled. And other companies that hang onto their employees will do

a lot better. Once a company goes through a whole bunch of layoffs, like it lays off five,

10% of its workforce or 15% of its workforce, people don't want to work there anymore,

because they're concerned that they're just going to get laid off again. So you can't

cripple that implicit contract between the high talent you need to make money. And your own

company, if you've just went through a bunch of layoffs, so is it going to work out a lot of the

outsourcing stuff? You know, you take all your code base and you ship it somewhere far overseas

in muggy weather. That didn't really pay out for a lot of companies because they ended up getting

costs cut in the short run, but the maintenance costs of badly written spaghetti code turns out

to be too high. So it's always with the economy, there's a bunch of hype. It's a great thing.

It's going to cut all these costs. It's going to be super efficient. And occasionally, of course,

it's true, but a lot of times it's not. And so there's this huge uncertainty about what's going

to happen with AI. And because, you know, every dollar you invest in, one company is not invested in

crypto, because all this money is flowing into companies based upon AI hype. If that AI hype

proves real, that will slow down over time as it just becomes the new norm, which means more

money is available for crypto. If it turns out to be false, then people will withdraw

money from those companies. They might of course put it into war stocks. They might put it into

other companies that didn't go through the AI bubble or hype. Some of it might go a bit coin,

but I think that's also a factor at the moment. And it's going to take a while to figure things out

because the companies that invest in AI are saying it's the greatest thing ever because they want

that investment money. And the companies that didn't invest as much in AI are saying it's a hype

and it's a bubble. And it's just going to take time to figure it out. No individual can do it

themselves. All right, hope that helps. Hope that makes sense. Freedomain.com slash tonight.

Take care, my friends. Bye.