Bitcoin was born in QE1, went to the moon in QE4 and will die in QT.
In 2018 when the Fed signalled the end of easy money and didn't even start shrinking its balance sheet , Bitcoin sold off to nearly 85%. It rallied hard at the start of 2019 when the Fed did an about-turn and stopped shrinking the balance sheet , cut rates and starts expanding again. It went to the moon when QE4 was launched buying nearly 100B assets per month.
Now the central bankers of the world are launching QT, approx 92B shrinking assets per month and that is only the US. Will bitcoin survive? it has only ever known QE ...
Many institutions borrowed heavily when QE5 was being discussed to fund build back better and bought thousands of bitcoin , Microstrategy opened a fund. and if QT lasts more than a year (which it certainly will because of food prices) then alot of them will face margin calls...Now that will be exciting.
I expect a 95-97% drop in Bitcoin, just like we saw in the dot.com bubble, many cryptos will go under like TerraLuna and many of these influencers who pumped bitcoin and claimed it will change finance transactions will realise how powerful an expanding balance sheet really was...
In 2018 when the Fed signalled the end of easy money and didn't even start shrinking its balance sheet , Bitcoin sold off to nearly 85%. It rallied hard at the start of 2019 when the Fed did an about-turn and stopped shrinking the balance sheet , cut rates and starts expanding again. It went to the moon when QE4 was launched buying nearly 100B assets per month.
Now the central bankers of the world are launching QT, approx 92B shrinking assets per month and that is only the US. Will bitcoin survive? it has only ever known QE ...
Many institutions borrowed heavily when QE5 was being discussed to fund build back better and bought thousands of bitcoin , Microstrategy opened a fund. and if QT lasts more than a year (which it certainly will because of food prices) then alot of them will face margin calls...Now that will be exciting.
I expect a 95-97% drop in Bitcoin, just like we saw in the dot.com bubble, many cryptos will go under like TerraLuna and many of these influencers who pumped bitcoin and claimed it will change finance transactions will realise how powerful an expanding balance sheet really was...