2 years, 11 months and 14 days later, Bitcoin (BTC) marks a new all-time high. A fine triumph despite its classification of “commodity” rather than currency, the insults of bankers from all walks of life, the Fork BCH, the ban of GAFAM and threats …
What is the difference with 2017?
This time, it’s businesses and billionaires who are buying. Money flowing into the Bitcoin blockchain comes from Investment Funds weighing trillions (Fidelity) but also smaller funds (Grayscale) not to mention the slew of billionaires who pride themselves on having them.
Where does this sudden come from? bitcoin rush ? Probably from Halving. Indeed, the Bitcoin’s inflation rate has recently halved. It is now 1.9%. Or less than the official central bank inflation target (real inflation is closer to 5% if not more). There are 18,552,000 BTC in circulation today and therefore only 2,448,000 BTC remains to be mined by 2140.
This almost fixed money supply should be in parallel with the trillions printed by central banks. The latter now openly declare that they want to generate high inflation … Imagine that more than 21% of all dollars (M2) printed by the FED were printed this year. This. Year.
The same goes for the ECB, which has multiplied its balance sheet by 7 since the 2008 crisis. So much money that will go to water the ponzi with the debt that will be repaid with inflation (your purchasing power).
It’s very simple, the euro has lost 3/4 of its value against Bitcoin since the ECB (Benoît Coeuré) described it as “the evil emanation of the 2008 crisis”.
The Frenchman, who is now on the side of the Bank for International Settlements (BIS), recently ate his hat by declaring that ” central banks have taken cryptocurrency high “. Or how to hang up the wagon of the current narrative framework which is to make the amalgamation between CBDC and Bitcoin to better sell us the end of Cash.
The sharp rise in the VIX (the fear index) in March, pushed all investors in the world to take refuge in US debt. That’s how it is, Uncle Sam’s debt remains the safest and most liquid asset in the world for now (you can buy billions of US bonds without moving its price).
The strength of the greenback automatically translated into a sharp decline in Bitcoin ($ 3650). This is nothing to worry about since Bitcoin is competing with the dollar to become THE international reserve currency. But the Covid crisis is an epiphenomenon. She also gave free rein to Central Bankers who jumped at the opportunity to print dumpers of money, giving BTC the advantage in this long run.
The Bitcoin has officially obtained sare stripes of international reserve currency since Iran has asked its Central Bank to accumulate some to pay for its imports. We are waiting for the day when she accepts Bitcoin for her oil. Soon a petrobitcoin …
Also note that we just learned that Janet Yellen should become Secretary of the Treasury if Biden ends up taking up his quarters in the Oval Office. The latter was the president of the FED before Jerome Powell and is supporter of a very “accommodating” monetary policy, as they say in the Orwellian world of central bankers. In other words, we must expect budget deficits to remain out of control …
$ 30,000 before the end of the year?
The Bitcoin really has a boulevard in front of it. It’s hard to see why he would stop at the $ 20,000 threshold. But since Bitcoin is a enfant terrible, it is worth recalling the best leading indicator of a turnaround: the net flows of Bitcoins on the exchanges …
The number of Bitcoins on deposit on exchanges has fallen by nearly 20% since the start of the year, with a net outflow of around $ 10 billion.
The graph below shows the net flows of Bitcoins on the exchanges. The green curve represents the net transfers of Bitcoins from exchanges to private wallets. The red curve represents the reverse path.
Generally speaking, this means that people move their Bitcoins from their private wallet to exchanges to sell them. You can see this very clearly with the sharp rise in the green curve in March which coincided with the fall in Bitcoin.
In other words, when the green curve gets too high, it will be time to sell (to buy back later, of course).
We remain bullish on TheCointribune despite recent attacks (here and here). Remember: a single Bitcoin will weigh half a million dollars when it is worth as much as gold.
Congratulations to all who held on 😉
- BTC / USD weekly chart (one candle = one week)