Cryptocurrencies

Bitcoin (BTC) continues to digest Elon Musk’s poison

The greenback is struggling

The Dollar Index was able to avoid a 3-year low thanks to the rebound in US stock markets. Nevertheless, the bleeding continues against the Chinese currency. The USD / CNY exchange rate is down almost 11% year on year.


The administration’s major investment plan Biden is not going to help matters. The budget deficit will reach 1300 billion per year for the next decade. This monetary creation will very probably weigh on the dollar via the worsening of the trade deficit. The latter widened further to reach a new record of $ 74.4 billion in March. Put another way, the USD leg of the BTC / USD pair is more than lame.

BALANCE OF TRADE USA since 2012
United States trade balance

Gold is doing a little better than the dollar. The Barbarian Relic came in at $ 1,900 an ounce for the first time in five months. This return to favor is linked to the acceleration of inflation which pushes real rates into negative territory. The real German 10-year rate is at an all-time low (-2.66%!). In other words, inflation is such that we lose 2.66% per year if we put our money in German debt …

German real yealds (10y BUnd Yields - inflation
German 10-year real rate (interest rate on 10-year debt minus the inflation rate)

What is good for gold is also good for digital gold. Especially since the crypto fear and greed Index has rebounded from its 13-month low. The fact that Michael saylor defused the controversy Elon musk is no stranger to this lull. We will come back to this at the end of the article.

“Transitional” inflation …

The governors of the FED are constantly asserting that inflation will be “transient” (4.2% currently) …

Unfortunately, central bankers do not have the same definition as we do when they use the terms “price stability” and “transitory”… For them, price stability means inflation of 2% per year. Transient means that prices will end up increasing less quickly, but not that they will fall …

The prices of certain raw materials such as copper and lumber are reaching record highs, in particular due to the rise in the price of a barrel, which is at its highest for two years. Moreover, commodities are not the only ones to appreciate. The semiconductors essential for smart gadgets of the fourth industrial revolution of Klaus Schwab are also under pressure.

Semiconductor inflation vs 10 years breaevens
The Philadelphia Semiconductor Index has a positive correlation with general inflation (the “10-year breakevens” is an indicator of inflation expectations based on the difference in yield between normal and inflation-protected Treasury bills). Source: Bloomberg

This inflation of semiconductors (necessary for micro-processors) is reflected in a multitude of products such as refrigerators, smartphones and cars. Bloomberg also reports that used car prices jumped 10% in April.

Speaking of Klaus Schwab, remember that the Davos guru had warned us that we had to expect “cyberattacks alongside which the Covid-19 crisis will pass for a walk in the park”. Thus, after the Evergreen tanker and the colonial pipeline of the American east coast, it is the turn of the Australian JBS, the largest producer of meat in the world, to be paralyzed by this cyberpandemic. This computer paralysis is linked to the fact that JBS is a leader in the implementation of robotic meat processing (due to the corona of course…).

1/5 of the United States meat supply is at a standstill. This new disruption of the global supply chain will worsen the rise in food prices. The global index of the FAO (the United Nations Food and Agriculture Organization) is approaching the highest reached in the 1970s (in the wake of the oil shock).

Who can well have an interest in causing inflation by destabilizing industries that emit a lot of CO2? … Anyway, this bodes very well for bitcoin, the anti-inflationary weapon par excellence.

A minor problem

The bitcoin mining industry is in the spotlight with Iran in particular banning it for the hot season. The Revolutionary Guards probably have the idea of ​​confiscating a few thousand additional mining after their roundup of 45,000 machines at the start of the year …

China has also caused a stir by cracking down on miners who use energy from burning coal. It is also because of coal that Michael Saylor convened a council of North American miners.

The meeting provoked an outcry because it was seen as the first milestone towards censorship of minor polluters. Some believe that this is opening the Pandora’s Box by exposing minors to lobbying that could lead to censorship of minors who do not use “clean” electricity.

In other words, climate change would be used as an excuse by globalists (Elon Musk) to control bitcoin. In order, for example, to maintain the embargo on Iran and Venezuela (whose electricity is very carbonated) in order to protect the petrodollar.

Another barrage fell on Michael Saylor following his congratulations to the mining pool Marathon. This pool was indeed the first to implement anti-money laundering control standards. Such zeal is not well received in the bitcoin world, especially since this pool has also recently stood out by being the last to signal its agreement to the Taproot update. Worse, the pool has already censored certain transactions in the past… Under pressure from the “pleb”, the CEO of the pool ended up making a video to pledge allegiance to the decentralization ideal of BTC.

For all these reasons, it is urgent that the pools adopt the Stratum V2 protocol in order to clearly signify their intention not to filter transactions.

Despite rising 20% ​​from the low, bitcoin continues to digest the escapades ofElon musk and the technical breakdowns of the past three weeks. The latest clarifications in India regarding the NO Bitcoin ban should support the pair in the near term. We remain below the 200 day moving average which is around $ 41,000. We will probably have to take this MM200 again to move forward.

PS: Keep an eye out for the Bitcoin conference taking place in Miami on June 4-5. Will be present in particular: the senators US Ron Paul and Cynthia Lummis, Michael Saylor, Jack Dorsey, Tony Hawk, Nick Szabo, etc.

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