After rising 120% in the space of a month, BTC / USD retracted 29%. Vertigo, surely … Like every Wednesday, here are the latest events to weigh.
The soufflé fell in line with the rebound of the Dollar Index. The index climbed above 90, benefiting from the sharp rise in the US 10-year borrowing rate. For the first time in nearly a year, Uncle Sam is borrowing at a rate greater than 1%, which mechanically boosted the attractiveness of the greenback.
For comparison, the German 10-year rate is in negative territory … while that of China is above 3%.
This pressure on US borrowing rates is probably linked to the presidential transition under high tension. More than 15,000 National Guard soldiers are being deployed to Washington for Biden’s dedication ceremony (January 20). CNBC reports that the FBI expects armed Republican supporters to demonstrate in front of the capitals of all 50 US states …
However, the dollar’s rebound is likely to fizzle out as the global consensus is clearly on the downside for 2021.
When censorship sets in
It will not have escaped anyone’s notice that Twitter and Facebook recently cut Donald Trump’s whistle. These reprisals follow the red wave that swept over the Capitol on January 6… This anastasia is so worrying that the German Chancellor has stepped up to the plate to remind people that freedom of expression is a fundamental right. It’s good to remember it …
Angela Merkel’s outstretched hand comes as a real purge is currently taking place on social networks. The accounts of hundreds of journalists, lawyers, members of parliament, high-ranking military personnel have been deleted. And as millions of people decided to quit Twitter and Facebook to find themselves on competing apps like #Talk, the latter was simply pulled from the app stores by Apple and Google. Worse, Amazon went so far as to disconnect the app from its servers on January 11.
Even Airbnb joined this Orwellian clean-up by declaring that the accounts of members of “hate” groups who participated in the January 6 capture of the Capitol would be deleted.
All this to say that this censorship is only a dystopian foretaste. Soon, with the launch of CBDCs and the end of cash, we will be prohibited from buying this or that. We will then understand the usefulness of a “permissionless” currency (which no one can stop you from spending) such as Bitcoin (BTC).
Never forget that it is in China, the country of “Social Credit”, that half of Bitcoin miners are found …
System operatives like Roubini jumped at the chance to play Cassandra, once again likening Bitcoin to the bubble of tulip bulbs. At the time, at the height of this tulipomania (1637), a single bulb was worth 10 times the annual salary of a skilled Dutch craftsman.
We are at the same order of magnitude with Bitcoin. Except that purely speculative bubbles never re-inflate. Quite the opposite of Bitcoin which is in its seventh bubble …
A bubble which, by the way, is fueled by an even bigger bubble: that of fiat currencies. Central banks still printed the equivalent of $ 26 trillion in 2020. Just that …
Morgan Stanley is not mistaken. New York’s fourth-largest investment bank has bought 11% of Microstrategy, the company of Michael Saylor, now famous for converting his company’s cash into bitcoins (70,000 BTC).
A bank that invests in Bitcoin? Sacred buy signal …
Where is Bitcoin at?
Cryptocurrency, with more than $ 500 billion on the counter, now weighs as much as half of all silver (metal) that comes out of the earth (1.7 million tonnes). Compared to gold, we are around 5%. Even more surprising: BTC is now the 14th largest currency in the world (M1 money supply). We are somewhere between the Russian ruble and the Swiss Franc.
The only downside: the bankers are organizing to lead bitcoin. For example, clients of banks like ING have received intimidating emails this week calling for caution when investing in BTC. Same story on the side of the English financial policeman (FCA).
We were also surprised to see HSBC (a bank convicted X times for money laundering) refusing money transfers from exchange bank accounts.
And let’s not forget to mention the exit of Jean-Claude Trichet, the former president of the ECB, whose scathing remarks on Bitcoin undoubtedly sounded the charge.
In short, it’s the sales, especially since the intensity of searches on google for the word “Bitcoin” is only 68% of the peak reached in 2017… Hold.
- BTC / USD weekly chart (one candle = one week)