Cryptocurrencies

Bitcoin (BTC) over $ 10,000

Bitcoin settles above the glass ceiling of $ 10,000. After blowing up a string of leveraged bearish positions lurking around, BTC is up over 50% since the start of the year and does not seem to want to stop there. The coming oil shock, the fall in real rates, the rise in gold, and the appointment of Judy Shelton to the Fed are all planets lining up for cryptocurrency.


The limits of growth …

It is no coincidence that giant investment funds, BlackRock in the lead, accumulate more and more gold. Great wealth managers know that a currency from interest-bearing debts requires to always generate more growth and debt.

Unfortunately, the physical laws of thermodynamics tell us that GDP growth is about to dissipate. In question, the peak oil that we have probably already crossed. Knowing that 95% of global transport runs on oil, it is hard to imagine how our economies can grow with less gasoline

It is easy to understand that our entire economy is in practice based on the consumption of energy. Considering that we transform resources into products and services, and that each transformation requires the use of energy, it seems logical that economic production is related to the amount of energy added to the system.

Source: TheShiftProject

Not to mention the climate change which will potentially be the biggest slayer of growth … Mark Carney, the president of the Bank of England, said nothing else:

Firms that ignore climate change will go bankrupt.

Mark Carney

These words are only the logical continuation of the scientific reasoning that industries based on the consumption of fossil energy and the emission of CO2 are doomed to disappear. Unless we agree to bequeath to our children a world to +10 degrees on the continents …

Energy in the world and in France: what will you remember from 2018?

It being understood that it is impossible to pay off debt without growth, the currencies that will be hit hardest by the oil / climate shock are those backed by the largest debts as well as the economies most dependent on black gold. Which does not bode well for the dollar

The following graph shows that the GDP growth is closely linked to oil consumption.

GDP vs World Oil Production
In blue: change in physical oil production since 1966.
In orange: change in GDP per person on a world average.
Sources: World Bank (GDP), BP (oil production)
, Theshiftprojetct, Jancovici

The formidable productivity gains obtained thanks to the fossil fuel combustion in machines are ancient history. Growth relentlessly slows decade after decade and we try in vain to compensate for this slowdown by debt. The United States, for example, before the Covid crisis, needed $ 4 of debt for every dollar of GDP

All currencies are debt except gold and Bitcoin. They can’t fall apart under the weight of a Ponzian debt system. same the money (metal) is on the rise, which is very indicative of the times. Indeed, being widely used in industry, the demand for silver declines during economic recessions, which is not the case at all this time.

Gold fever

Don’t miss our article on the correlation between gold and Bitcoin. The two currencies are evolving more and more tandem and this synchronization is not unrelated to crossing the rubicond of $ 10,000.

We have just discussed the underlying reasons behind the rise in gold, but it is also benefiting in the short term from the weakness of the greenback. The Dollar Index (DXY) and the Bloomberg Dollar Index have been in free fall since the end of March.

Bloomberg Dollar Index
The DXY is a weighted average of the dollar’s value against the Euro (57.6%), the yen (13.6%), the British pound (11.9%), the Canadian dollar (9, 1%), the Swedish krona (4.2%) and the Swiss franc (3.6%). The Bloomberg Dollar Index is an average over a somewhat larger basket of currencies (10 currencies also including the Mexican peso and Indian rupee).

The yellow metal is also raised by the drop in real rates. Indeed, with rates at the lowest since 4000 years (which is very good), the real rates are now negative, which is the biggest incentive to buy gold.

Explanation. Imagine that you have placed 100 euros in your savings account and the interest rate is 0.50%. At the end of the year, you will have 100.5 euros. But while inflation was 0.50% over the same period, your purchasing power remained the same. Your extra 5 cents does not allow you to buy more because the prices have increased by the same order of magnitude. So your real rate is 0%.

Another example. If your savings earn you 0.50% and inflation is 2%, you are getting poorer Actually of 1.5% every year (0.50% – 2%). Under these conditions, you might as well place your money in a “safe haven”.

See it 10-year real rate US below. Currently, a fund investing in US debt is seeing its purchasing power melt by 0.97% each year. Real rates are the biggest driver of gold and, in turn, Bitcoin. Not to mention that the real inflation figures (including real estate) are much more painful than we are told.

The real 10-year yield curve is inverted to better show the correlation

No Futures

Another sign that does not deceive: the demands of physical delivery of gold on the COMEX (NY Gold Exchange). They are at highest historical with 170 tons of gold (5,510 ounces) actually delivered in June.

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COMEX Gold physical deliveries June 2020
Requests for physical deliveries of gold

Let’s do a little reminder on the ” Futures ” before going further.

Futures are a parallel market to the so-called “physical” / “spot” market, where cocoa, corn, copper, uranium and … are actually sold and bought. of Bitcoin. By the way, Bitcoin is the only currency in the world that is chained to a Futures market (with ethereum) … Why? But because the bankers want to turn it into a vulgar ”active” crypto in order to manipulate its price as they do with raw materials.

Futures allow you to buy commodities that will be delivered later at a price fixed in advance (contracts of up to 8 years for WTI oil on the CME VShicago Mercantile Exchange). Futures were originally created as simple insurance to protect against future price fluctuations. For example, a farmer may decide to sell his harvest for the following year at a price set today in order to secure his income in the event of a poor harvest.

But very quickly these “assurances” became the epicenter of bank speculation. This “ financialization “Of the commodities market allows for a” short “position in selling raw materials that you don’t own… Which is obviously impossible on the physical market.

The only way to break these bankers who are suppressing the rise in gold (and Uranium, and Bitcoin etc …) is to ask for physical deliveries. This is a problem in many cases (you have to be able to store) but not at all with Bitcoin (all you need is a wallet and basta).

That being said, Bitcoin is being manipulated in an even grosser way since CME Futures do not physically deliver Bitcoin ! Yes, it’s legal …

Unlike the CME, the platform Baakt does deliver bitcoins. The latter also recorded this Monday her all-time high with a volume of 11,509 BTC against 1,726 BTC on average.

Volumes of Bitcoin-backed Futures on Bakkt

Figures to be taken with a grain of salt because Baakt represents only a small part of the Futures market dominated by the exchanges Huobi, Binance or the CME.

In gray the market share of BAKKT, in orange that of the CME (Chicago Mercantile Exchange)

This record is nevertheless a very good omen for BTC …

$ 20,000

The rally of 2017 which propelled Bitcoin not far from $ 20,000 was partly the result of manipulation (# Tether …) but also the consequence of real global awareness.

The graph below shows that the word “Bitcoin” is nowhere near as sought after as in 2017. This signal is much more effective than any RSI, MACD and you need to watch it very closely in order to predict the new wave of bitcoiners.

Google trend
Google searches for the word “Bitcoin”

The economic crisis caused by confinement in the face of Covid (non-lethal in 99.8% cases …) is not conducive to savings, but we can bet that we will soon change the paradigm in this twilight of financial capitalism.

See below the current value of the check for $ 1,200 sent to Americans in March if they converted it to Bitcoin right away. + 50% …

How long will the masses have confidence in this mountain of slave debt? How long will they ignore the fact that China is forcing a return to the Gold Standard?

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The appointment of Judy Shelton, a staunch defender of Gold Standard, to the FED, is a powerful reminder of what real money is. The days of exorbitant dollar privilege and abundant energy are over. We are entering the era of surveillance capitalism and inflation. Woe to those who did not have enough independence of mind to keep real money on the left.

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