Key takeaways
- Lepard says Kevin Warsh’s inflation measurement task force is designed to justify rate cuts ahead of the 2026 midterm elections.
- Bitcoin at $59,000 is in a historical cheap zone reached less than 10% of the time, according to the power law model.
- The strategy generates about $1.7 billion in annual preferred dividends versus $55 billion in bitcoin holdings, a charge Lepard says bitcoin at 4% annual gains can cover.
The Fed chair plays both sides
Lepard explained why he thinks Fed Chairman Kevin Warsh is signaling rate cuts even as market prices rise. Before taking on this role, Warsh publicly argued that Dallas’ discounted average PCE, which is about 100 basis points below the overall CPI, could be a more accurate indicator. inflation gauge. He also compared today’s productivity gains from artificial intelligence (AI) to the tech boom of the mid-1990s, when Greenspan kept rates low without triggering inflation.
“I think those two things suggested to me that he wanted to cut rates,” Lepard said during the interview. “I suspect he said both of those things to Trump. I suspect that’s part of why he was selected for the job.”
That changed after a bad time inflation draws linked to the rise in oil prices following the closure of the Strait of Hormuz. The market is now pricing in rate increases. Lepard thinks reading is a mistake.
His reasoning: The U.S. government bears $1.3 trillion in annual interest expenses. According to him, a substantial increase in rates is structurally impossible. Warsh’s new working group on inflation According to Lepard, this measure is designed to give political cover to the declaration inflation lower than official figures show, paving the way for reductions before the midterm elections.
“The chances that the Fed will raise rates this year are zero,” he stressed. “And the market thinks the chances of them raising rates this year are 100%. One of us is right and the other is wrong.”
Bitcoin and the law of power
Bitcoin fell below $60,000 during maintenance. Lepard noted that it also fell below the 200-day moving average and briefly fell outside the power law corridor, a logarithmic scale model developed by researcher Giovanni Santostasi and further developed by mathematician Fred Krueger that corresponds to bitcoinof price history with an R-squared correlation of 95%.
Lepard described the current price as being close to or less than half a standard deviation below the power law mean, an area bitcoin has occupied less than 10% of its entire trading history. Before bear marketsprices in this area tended to recover within a few weeks or even months.
He previously cited bear market declines of 70%, 80%, and 90% as context for why this cycle’s roughly 50% correction from the October high may indicate maturing adoption and decline volatility. He does not rule out a further fall below $50,000, but considers it unlikely that a price below $50,000 will be reached.
” Bitcoin Right now, compared to its 200-day moving average over its entire history, it’s really quite cheap,” he noted.
Lepard continued:
“It’s only been this cheap less than 10% of the time.”
The next big impression
Lepard’s fundamental macroeconomic thesis holds that the U.S. debt-to-GDP ratio, currently around 124 percent, cannot be solved by growth alone. He cited former Treasury Secretary Hank Paulson’s recent appearance on Bloomberg after 15 years of public silence as a signal that insiders are preparing markets for a future. liquidity crisis.
Each successive intervention by the Fed has been more significant than the last. The 2008 response totaled between $2 and $3 trillion over three years. The COVID response reached approximately $5 trillion over 18 months. Lepard expects the next move to exceed both size and speed.
He frames goldmoney and bitcoin as insurance against currency devaluation, essentially the trade in devaluation. Bitcoin ranks first in its hierarchy because it cannot be printed, transfers in minutes, incurs no storage costs, and has a 16-year history of adoption growth despite repeated deep withdrawals.
Strategy and mathematics
Lepard also said critics of Michael Saylor’s strategy failed to do the basic math. Strategy’s preferred stock dividend obligations total approximately $1.7 billion per year. With approximately $55 billion in bitcoin balance sheet at the time of the interview, Lepard estimates that Strategy should sell around 4% of its bitcoin per year to cover this obligation. If bitcoin appreciates by at least 4% per year, ordinary shareholders reach the break-even point thanks to this mechanism alone. BitcoinThe historical annualized return of is well above this level.
“You can’t break the strategy,” he said. “I mean, you break it if bitcoin breaks. But if bitcoin stays between $50,000 and $60,000 for a few years, they will be fine.
He added that he was selling gold and silver positions to buy both bitcoin and Strategy at current prices, which he considers attractive given Strategy’s $33 billion market capitalization compared to what he projects, this is a multi-billion dollar long-term potential.
Where is Lepard positioned?
Lepard has a large staff bitcoin ( BTC) stack and a significant strategic position. He asked auditors to size Bitcoin exposure so that a 50% decline would not force a sell-off, and said that at current prices he would consider a flat-rate entry rather than dollar cost averaging, given how rare Bitcoin is reaching this price zone relative to its history.
His price targets: about $180,000 over the next two years, $1 million around 2031 or 2032 based on the energy law, and about $6 million per coin within 15 years. He views these goals as consistent results from a model that has maintained a 95% correlation throughout the entire history of the Bitcoin market.
