Bear Winter Is Here, BTC and DJIA Clear Correlation!
I have been floating the hypothesis for a while that mania surrounding bitcoin and its clear 5 wave bull market was tied to the easy credit enviroment created by global reserve banks in the wake of the 2007-2009 global financial crises. I think this chart is just another feather in the cap of that hypothesis as it clearly shows both bull markets started on almost the exact same month and year and ended on excatly the same month and year. The clear nature of these two correlations, coupled with the logical conclusion that easy credit, cheap money and an appetite for yield would drive main street and wall street alike to seek return in highly speculative and risky vehicles such as bitcoin, presents the clear eyed man (not meaning male but meaning human) with a open and shut case. Simply put, the growth/mania of bitcoin since its birth was fuelled by cheap fed money and coincided with growth in U.S. and global equity markets. Now that the fed has signalled an end to cheap money global markets have begun to contract and a retreat from risky and speculative assets has naturally followed. Therefore we conclude that bitcoin, despite what many people wish to believe, is not a safe haven during times of economic turmoil but instead acts just as one would expect an asset of its class to. Bitcoin is not going to save the economic order or bring a revolution upon the bankers, no, instead it is at the mercy of the global macro economic enviroment just like almost any other asset class. If you want saftey buy Land or low yield bonds, but if you like extreme risk and volatility then maybe bitcoin is for you. I hope this helps clear up, even a little, what is going on for bitcoin.
All the best,
Red Boar
All the best,
Red Boar
Comment:
I apologize for the ranty nature of these updates but I am just typing off the top of my head with no proof reading, anyways,
Institutions are NOT coming to save you...get this meme out of your heads any instiution that would willining buy into an asset that regularly dumps 80-90 percent of its value is either already bankrupt, on the road to bankruptcy or operating illegally (ever heard of fiduciary responsibility?). The fact is major hedge funds do not have the risk tolerance built into their systems to withstand REGULAR 80-90 percent drawbacks, they just don't plain and simple. Also, as I have pointed out numerous times, even if these so called institutional saviors wanted or were allowed to come to the rescue why are they going to invest in a HIGHLY speculative asset class that has ZERO regulation, is filled with massive manipulation, is controlled 90+percent by a few private players all the while their regular portfolios are getting crushed due to a repeat (only worse) of the 2008 financial crisis. Listen guys it is so simple, when there is cheap money wall street takes risks,people take risks...when money becomes more expensive humans seek shelter and saftey... 80 percent collapse on the regular is not safe....lol.
Institutions are NOT coming to save you...get this meme out of your heads any instiution that would willining buy into an asset that regularly dumps 80-90 percent of its value is either already bankrupt, on the road to bankruptcy or operating illegally (ever heard of fiduciary responsibility?). The fact is major hedge funds do not have the risk tolerance built into their systems to withstand REGULAR 80-90 percent drawbacks, they just don't plain and simple. Also, as I have pointed out numerous times, even if these so called institutional saviors wanted or were allowed to come to the rescue why are they going to invest in a HIGHLY speculative asset class that has ZERO regulation, is filled with massive manipulation, is controlled 90+percent by a few private players all the while their regular portfolios are getting crushed due to a repeat (only worse) of the 2008 financial crisis. Listen guys it is so simple, when there is cheap money wall street takes risks,people take risks...when money becomes more expensive humans seek shelter and saftey... 80 percent collapse on the regular is not safe....lol.
Something I think people fail to understand is this cycle/85 percent decline for bitcoin is not like past ones. In the past bitcoin went from 20 dollars to 1 dollar and it went from 1300 dollars to 150 dollars...these moves, although significant in terms of percent lost are minisucle in terms of market cap and the amount of actual usd it took to pump bitcoin to new all time highs. What is so different about this move is not only has bitcoin (once again) lost 80-90 percent of its value BUT the amount of USD it would take to reinflate the bubble is no longer insignificant. Essentially the way I see it, the first two small bubbles (which were waves 1 and 3 repsectivley)were just test runs for the epic mania fueled bubble that occured last year which was in my opinion "the grand finale". Think about it, everbody is thinking somehow if they just hodl they will be just fine, almost noone in the space is truly in panic...why? because everyone thinks "it will be just like last time we just need to get through this". Well, this time it will be different. I will continue in another update.