The Fed is sprinting to fight inflation. As a function of its tardiness, the Fed is willing to tighten credit as quickly as possible, not caring about slaughtering risk assets in the process. In fact, Fed officials seem to be fine with the pace of the decline given their silence on the matter of late.

The Fed’s dual mandate is to maintain full employment and stable prices. It has clearly botched the latter, and it’ll impact the former to correct it.

Bitcoin has fallen harder and faster than its traditional finance compatriots. Why? Bitcoin has very low liquidity (~$0.5 trillion in total market cap) relative to other asset classes (over ~$100 trillion in total global equities), often extremely high leverage, and no bailout lender of last resort.

We might believe in the narrative of bitcoin as a risk-off asset, but the market certainly doesn’t.

While strong correlation may be there 90% of the time, all you need is one of these major legs-up per year to achieve bitcoin’s astronomical compound growth profile. Despite prolonged regimes of strong correlation with equities, the protracted periods of extreme appreciation separate bitcoin from every other asset in history.

Bitcoin has faced 12 drawdowns of this same magnitude in its history, and yet it’s still here.