BitcoinPanjang
Rising interest rates are not affecting Bitcoin anymore
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Before significant interest rate hikes, I have claimed that Bitcoin is decoupling from the rest economy (which probably happened).
However, the effect of rising interest rates still had some power over the Bitcoin in the tank.
It seems that this power of raising interest rates is diminishing for Bitcoin relative to the rest of the economy which will probably suffer quite a bit more after this post.
The chances of Bitcoin being affected by raising interest rates are becoming lower and lower.
The bitcoin community is pricing in these hikes a lot earlier than the rest of the market. The same thing happened when inflation started (2020), when Bitcoin moved significantly quicker than the CPI.
My estimate is that the Bitcoin public generally sticks (as do I) to the rule that Inflation is defined as an increase in money supply and deflation is defined as a decrease in the money supply.
These numbers are available much quicker than CPI (Consumer Price Index) which is a trailing indicator and can lag 15-24 months on average.
The same thing happened in reverse now.
One more important point is that monetary inflation is much more difficult to reverse through rising Interest rates, and the community is also aware of this. In my previous posts I have explained
how interest rates cannot curb inflation (even in theory) unless they overshoot the current CPI number, which at the time was over 9%.
Interest rates could have bigger effects at <9% rates only if they break the economy (which slowly might start happening), but this will still not be enough to reduce the money supply.
This could stop further inflation at <9% interest rates, however at the cost of economy. What they cannot do is reverse inflation, meaning that all the money that is in the system will stay in the system
and prices will not come down. Killing inflation this way will be paid for through increased poverty and decreased standard of living, until the economic growth "eats" through that "debt". Which at a
2-3% rate could take multiple years.
If we account for all of these effects and consider the Bitcoin community world views, the chance of further fall is very low, while the stock market still has a lot of down room.
However, the effect of rising interest rates still had some power over the Bitcoin in the tank.
It seems that this power of raising interest rates is diminishing for Bitcoin relative to the rest of the economy which will probably suffer quite a bit more after this post.
The chances of Bitcoin being affected by raising interest rates are becoming lower and lower.
The bitcoin community is pricing in these hikes a lot earlier than the rest of the market. The same thing happened when inflation started (2020), when Bitcoin moved significantly quicker than the CPI.
My estimate is that the Bitcoin public generally sticks (as do I) to the rule that Inflation is defined as an increase in money supply and deflation is defined as a decrease in the money supply.
These numbers are available much quicker than CPI (Consumer Price Index) which is a trailing indicator and can lag 15-24 months on average.
The same thing happened in reverse now.
One more important point is that monetary inflation is much more difficult to reverse through rising Interest rates, and the community is also aware of this. In my previous posts I have explained
how interest rates cannot curb inflation (even in theory) unless they overshoot the current CPI number, which at the time was over 9%.
Interest rates could have bigger effects at <9% rates only if they break the economy (which slowly might start happening), but this will still not be enough to reduce the money supply.
This could stop further inflation at <9% interest rates, however at the cost of economy. What they cannot do is reverse inflation, meaning that all the money that is in the system will stay in the system
and prices will not come down. Killing inflation this way will be paid for through increased poverty and decreased standard of living, until the economic growth "eats" through that "debt". Which at a
2-3% rate could take multiple years.
If we account for all of these effects and consider the Bitcoin community world views, the chance of further fall is very low, while the stock market still has a lot of down room.
Nota
Money is a fundamental medium of exchange of information and value. It connects everyone in society into a global computing network, composed of the combined processing power of all the people in the world.
It is essential that the money supply is fixed, or at least stable and predictable so that our global „supercomputer“ could easily compensate for errors.
Accumulation of these errors could lead to massive mistakes and instability and there is a high probability that most of us won't be able to learn what the problem was even after the fact.
Our monetary system is corrupt. It is equivalent to an idiot banging on a computer with a rock and tasing the motherboard, and expecting it to work faster or better.
Our governments also don't help with centralized price control, import/export control, or exchange rate control.
Every such action creates ripples of errors through the system. and those errors will be extremely hard to trace and could impact parts of our economy and society that are seemingly disconnected from one another.
It's a butterfly effect, and we don't have the computing power to trace each step to the source of the problem.
Nota
I increased my current position by 20%Nota
Other people share my opinion too. youtube.com/watch?v=RAyrq9ZYG5Y&ab_channel=SavvyFinance
Nota
I have increased my position by additional 20%Nota
After the FED meeting, we can see how Bitcoin is not correlated with tech stocks anymore (NASDAQ). The upside is still far away, but the downside is very limited unless some major changes happen with macroeconomy.
Nota
I sold half of my ADA position and bought Bitcoin with it.Nota
The Run of the Golden Bull: youtube.com/watch?v=nJeddv1QbeQ
Nota
I'm moving 100% of all my assets and savings into Bitcoin.By the end of 2023. I will close all my bank accounts forever.
Also migrating all my business to the Bitcoin standard.
The race is over, Bitcoin won.
Nota
Again, I told you so XD
Penafian
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