Cryptocurrencies

Bitcoin (BTC) rebounds 20%

Rumor and cocktail of FUD

We have known this for a long time. Joe biden wants to raise taxes. Sources close to the White House argue that the tax on capital gains and dividends should drop from 29% (on average) to 48%. We could even reach 58% in New York, where the stock exchanges are.


It didn’t take much more to throw a little fuel on the fire while bitcoin was in trouble. This news rocked bitcoin, wrongly. For three reasons. First of all, it doesn’t say that the US Senate will vote against its sponsors of Wall Street… It will take only one Democratic senator to abstain for this law to fall into oblivion.

Second, only 0.3% of the richest taxpayers will be affected. In other words, it means less bitcoins for those who already have too much money, and that’s fine.

Third, it’s highly likely that speculators will turn into holders, which would be great news for bitcoin. The WSJ reports that Americans tend to sell less when the capital gains tax rate increases.

In the same vein, it should be noted that Turkey has banned bitcoin payments, which has also caused a chill. However, the exchanges are functioning quite normally and bitcoin has not been banned at all.

Saudi Arabia vs Bitcoin vs Iran

Another FUD also spread like wildfire this weekend. Saudi Arabia would have decided to “completely ban cryptocurrencies” …

"saudi govt said to put complete ban on cryptocurrencies"
“Saudi government will ban cryptocurrency altogether”

This is Livesquawk, an audio service for quickly obtaining market news, which released this information. Umpteenth fake news, especially when we know that the cutters of journalists have banned bitcoin in 2018 …

But it is a very sensitive subject because the Saudi kingdom is at the heart of the petrodollar system. Americans’ standard of living would collapse overnight if Riyadh decided to no longer sell its oil exclusively in dollars. It is thanks to this system that the American currency keeps its value despite a chronically negative trade deficit.

However, there is a village of diehard Persians who, since a coup organized by the CIA and the MI6, swore the fall of the empire. By refusing to sell its oil in dollars, Iran has drawn the wrath of Uncle Sam, who placed it under embargo via a disconnection from the SWIFT network. Only China now dares to buy Iranian oil, hence the sharp Sino-American tensions.

Bitcoin will soar the day Tehran accepts bitcoin as payment for its oil exports. And it is clear that this day is fast approaching since thethe central bank of Iran has just authorized this weekend the banks to settle the imports in bitcoin !

One of the richest countries in the world in gas and oil is turning bitcoin into an international reserve currency as we cross peak oil. Bullish …

Inflation out of control

Bitcoin is a “permissionless” currency unlike fiat currencies which depend on the goodwill of the SWIFT network (and therefore of Washington) which infuses all international transactions. Iran has understood this well.

In addition, there is another property that strongly contributes to its success: its fixed money supply. There will never be more than 21 million BTC. Bitcoin is therefore a store of value in the face of inflation purposely orchestrated by bankers and governments.

However, inflation is freewheeling. The graph below shows the number of times the word “inflation” was mentioned during the first quarter earning calls. Three times more than in 2020 … [Les « Earning calls » sont des téléconférences pendant lesquelles les multinationales discutent publiquement des résultats financiers du trimestre passé]

Number of times the word
Number of times the word “inflation” was mentioned during the first quarter “earning calls” of the S & P500 multinationals

The prices of many commodities are now above the levels that prevailed before the start of the pandemic. We are often 10% more, sometimes 50% (steel). Worse, wholesale prices of agricultural commodities have also increased by 50%, at their highest for 9 years.

Bloomberg agriculture spot market

To put it another way, food prices will soar before the end of the year. And since food is an important component of calculating inflation in Asia, Bloomberg warns that “This strong inflationary drive in the region which is home to more than half of the world’s population is expected to drive up labor costs at factories around the world. The rise in inflation in Asia will have repercussions globally in the months to come. “

It is therefore to be expected that the long list of multinationals that have converted part of their cash into bitcoin will continue to grow.

Bitcoin shortage, JP Morgan, Coinbase

Let’s finish by pointing out that the exchanges are still suffering from a BTC hemorrhage. Apparently more and more of us are realizing the importance of being the sole owner of our bitcoins. This “shortage” does not seem ready to end and is undoubtedly adding to the upward pressure.

Number of bitcoins on exchanges vs bitcoin price
Orange curve: number of bitcoins on exchanges / Gray curve: price of bitcoin (log scale) / Bitcoin miners collectively hold 4.57 million BTC according to @coinmetrics.

Among other more trivial news, note that JP Morgan now allows its customers to buy bitcoin. As a reminder, JP Morgan is the largest American bank. This green light from the financial renegade drives the point home: bitcoin is Too Big to Fail.

The New York bank probably wants to hunt on the lands of Coinbase, which has just gone public and which has millions of new customers every week. Here is what we wrote in this title in an article this Monday:

“Just a week after Coinbase’s IPO, the numbers were thrilling counters. 2.7 million downloads in 7 days. […] Metcalfe’s Law promises a bitcoin worth several hundred thousand dollars. […] According to Michael Saylor, we could have 250 million users by the end of the year and a billion within 5 years… ”

BTC / USD
BTC / USD weekly chart

We are keeping the focus on the $ 100,000.

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