In Bitcoin You Trust?I keep hearing an awful lot about bitcoin is the future, that bitcoin will skyrocket to $100,000 which makes no sense because they fail to realize the amount of money that would take. I wonder where the money comes from...? In this chart, I will give my take on Bitcoin and where I see it going. If I am wrong, I gladly accept it but I highly doubt that I will be. Let's start where it begins:
Bitcoin 2017
In December 2017, Bitcoin futures were now offered and part of the market thanks to CBOE . As you can tell, in early 2018, up to Dec 2018 bitcoin wasn't following the equities market until 2019 where we see the Nasdaq rising consecutively from Feb 2019 until July 2019. In that same period we also see Bitcoin rallying. It isn't until March 2020 where we see the truth. Bitcoin crash as the same time as the markets did, and in fact it lead in terms of percentage lost, it was the worst performing asset.
Quantitative Easing
March 2020 saw the beginning of QE4, where the Fed started throwing money at everything. Hence the parabolic rise in the stock market, setting new all time highs.... during a PANDEMIC & RECESSION. Make sense? Not at all. The Fed is solely responsible for the markets rallying. Period. Ironic that at the same time the Equities market rises, Bitcoin also rallies.
Quantitative Tightening
In Nov, 2021, the Fed announced that QE had done its job (creating the biggest bubble ever) and now stated they were going to ease, and reduce their balance sheet . Well, as we saw, the Nasdaq AND Bitcoin peaked in November 2021 and started crashing significantly. Once again, Bitcoin was the leading loser and worst performing asset.
2023 Rally Explained
Now, investors are looking at Bitcoin rising from $16,000 to now $28,000 and saying this the beginning of a bull market. But, once again, with a little digging we see that stocks and bitcoin are rising because...... The Fed Balance sheet skyrocketed during the March banking crisis. Stocks were crashing but in came the Plunge Protection Team, saved the day by pumping the dying toxic stock market. The stock market is like a nice looking car, but under the hood and on the inside, it's all old, worn, broken, missing the engine, torn up and abused. The stock market does not reflect the economy, because if it did, the markets would be down 50% at least.
If you need a visual aid, search S&P500 vs Fed Balance Sheet
Conclusion and Key Take Away's
- Bitcoin follows the market, no doubt.
- Bitcoin benefitted from QE
- Bitcoin is NOT a safe haven, and in fact is -the worst asset to hold during turmoil.
- Bitcoin , like the equities market is manipulated and controlled.
So, where do I see Bitcoin going? I see it collapsing when the markets collapse. The markets can not hide the absolutely horrible economic data much longer. If this was 2008, based on this data coming out, markets would be far passed a correction. The ONLY thing holding this market up is the Fed and it'll continue to do so for a little more until it slips their control. So, if the stock market collapses and if we clearly see that Bitcoin follows the stock market to a T, than what does this mean for crypto when markets fall? It will once more collapse and be the worst performing asset when it does fall. Smart money is going into gold and silver . Everyone else believes in crypto as a safe-haven, yet clearly have not done simple due diligence to see that not only is it not a safe haven, but between commodities , stocks, and treasuries, crypto is absolute worst asset to own. The $30 trillion dollar QE charade bubble is about to explode and there is nothing anyone can do to stop it. The data is getting worse. The consumer debt is at record highs and savings are at record lows. Retail isn't coming back. Discretionary spending is down significantly. Demand has collapsed. ISM crashed. Manufacturing crashing. Housing is crashing faster and steeper than in 2008. Autos down significantly. Inventories are down to March 2020 lows. Orders are being cancelled. Layoffs are rising faster than in the last 3 years. The writing is on the wall folks, they can't hide this much longer. The greed will give way to financial pain.
Benefit from BTC crash?
Absolutely. Look into BITI and go from there ;)