#1570 Marko Papic | The Case for $250K Bitcoin in a Falling Dollar World
🎯 Summary
Podcast Episode Summary: #1570 Marko Papic | The Case for $250K Bitcoin in a Falling Dollar World
This episode of the Pom Podcast features Anthony Pompliano interviewing Marco Paikowsky, Chief Strategist at BCA Research, for a deep dive into macroeconomics, geopolitics, and their implications for asset allocation, particularly focusing on the US dollar, equities, gold, and Bitcoin.
1. Focus Area
The discussion centers on macroeconomic shifts and geopolitical risk, analyzing how evolving US fiscal and monetary policy, coupled with global political dynamics (tariffs, international relations), will dictate the performance of major asset classes over the next five years. The core theme is the expected decline of the US dollar and the resulting bullish outlook for assets like Bitcoin and gold.
2. Key Technical Insights
- Policy-Induced Slowdown Trading: When economic slowdown is policy-induced (e.g., by tariffs or fiscal restraint), investors should trade the policy outcome rather than relying solely on traditional macroeconomic data, as policy shifts can override immediate economic signals.
- The Fed’s Political Reality: The concept of Federal Reserve independence is challenged; Paikowsky argues central banks are inherently political institutions always subject to macro context and political pressure, especially from charismatic leaders like a potential second Trump presidency.
- Private Credit Visibility Gap: A major structural concern is the massive, opaque growth of private credit markets following the disintermediation of banks post-GFC, representing an area of high risk for future systemic disruption during a recession.
3. Market/Investment Angle
- Bullish on Equities (Counterintuitively): Paikowsky is bullish on the US market because he believes fiscal policy has peaked (due to political pushback against high deficits) and the Fed will pivot dovishly under political pressure, leading to lower borrowing rates (short and long end).
- Egregiously Bearish on the US Dollar: He predicts a significant 30% decline in the US dollar over the next five years (targeting the Euro at 1.40), driven by necessary capital account adjustments as the US current account deficit corrects. This dollar weakness is viewed as positive for the US economy long-term.
- Massive Upside for Bitcoin and Gold: The expected dollar decline acts as a major catalyst for hard assets. Bitcoin is framed as “gold with wings,” suggesting it will outperform gold significantly in this environment, leading to a target price projection of $250,000 Bitcoin.
4. Notable Companies/People
- Marco Paikowsky (BCA Research): The expert guest, whose background in political science informs his analysis of institutional behavior (Fed, government).
- Donald Trump: His potential return and his “charismatic” style of authority are central to the discussion regarding pressure on the Fed and the shift toward more prudent fiscal policy relative to recent years.
- Jerome Powell: Mentioned in the context of political pressure and the potential for a “shadow Fed chair” appointment.
5. Regulatory/Policy Discussion
The conversation heavily focuses on policy:
- Fiscal Policy Shift: The anticipation that fiscal spending will slow down due to political pushback against high deficits is a key bullish driver for markets (as it removes long-term yield pressure).
- Tariffs as Global Reform Catalyst: Tariffs, while potentially disruptive, are viewed as “cod liver oil” for the rest of the world—forcing countries like Canada and those in Europe to undertake necessary structural reforms and boost domestic investment/productivity.
- Monetary Policy Pressure: The expectation that political pressure will force the Fed toward lower rates, potentially undermining its perceived independence.
6. Future Implications
The industry is heading toward a period defined by currency depreciation (specifically the USD) and a rebalancing of global growth away from US exceptionalism driven by fiscal stimulus. This environment strongly favors non-sovereign, hard assets like Bitcoin and gold as hedges against fiat debasement. The hidden risk lies in the largely unobservable private credit markets.
7. Target Audience
This episode is most valuable for Macro Investors, Portfolio Managers, and Crypto Strategists who need to understand the interplay between geopolitical risk, central bank policy, and high-conviction asset allocation bets (especially regarding the dollar/Bitcoin thesis).
🏢 Companies Mentioned
đź’¬ Key Insights
"Anything that happens in the Middle East, if you want to look at it from an investment perspective, you have to ask yourself a very simple question: Will this impact the transit of an oil barrel from oil fields inside your area through the Strait of Hormuz? If the answer is no, you should not care about it."
"My question to the digital asset community is, when is it that we start using those assets to price goods and services? I'm not sure Bitcoin is capable of doing that because it's a little bit too geared towards a store of value role, which means it has a deflationary property, which isn't good for an expanding growth and expanding economy."
"The US dollar could go down to 25% of global reserves, and it could still be a reserve currency in the fact that it's used for financial transactions. We have to price goods and services in something; we price it in dollars."
"My partner Bitwise is the first and only Bitcoin ETF provider to openly publish its Bitcoin wallet addresses, allowing anyone to verify the fund's holdings. I believe this level of transparency is exactly the kind of innovation that only crypto makes possible."
"The higher the price goes, the less risky it becomes to the central banks. And usually, it's the opposite, right? Like the higher Nvidia stock goes, the more people are like, 'Oh my god, it's a bubble.' And so there is this Goldilocks zone, if you will, where as Bitcoin kind of reaches a certain threshold, now it's big enough to allocate to. But as it gets bigger, it actually becomes safer."
"For every 10% the dollar goes down, you should expect Bitcoin to add a zero or double in price."