What the Hell Is Happening With BTC!? It’s up $8K in 10 Days...
Article source, here.
TL;DR
BTC is up $8K in 10 Days - currently sitting at ~$28K. But why? There're a few theories floating around…
The first: The Silicon Valley Bank (SVB) collapse scared enough people into moving some of their net-worth into a currency that doesn't require a bank for safe custody.
The second plays into the common theory that Bitcoin is an inflation hedge, and is reacting to the potential lowering of interest rates.
Tech/crypto figure Balaji is so convinced we're about to see a $1M Bitcoin (as a result of hyperinflation 😰), he's placed a million-dollar bet on it.
Full Story
Ok, it's time for a much belated 'bi-weekly' check in with Bitcoin.
In case you haven't checked the markets over the past few days - BTC is on an ab-so-lute tear! As of this writing, it's sitting at $28K.
(For context, 10 days ago it was under $20K).
So how did this happen? Well, there're a few theories floating around, so we figured we'd list them.
The first is simple:
The Silicon Valley Bank (SVB) collapse scared enough people into moving some of their net-worth into a currency that doesn't require a bank for safe custody.
(There were 1 million new Bitcoin wallets create the same weekend that SVB collapsed, so...).
The second plays into the common theory that Bitcoin is an inflation hedge. A theory summarized beautifully by Anthony 'Pomp' Pompliano:
The basic gist being this:
The Federal Reserve is stuck between a rock and a hard place.
If they raise interest rates again, there's a high chance we'll see more bank collapses. If they lower rates, inflation will continue to rise.
The "best inflation hedge", according to Pomp is, of course: Bitcoin.
But before you cry 'Bitcoin maxi!' - the man comes with receipts!
Pointing to the fact that markets are forward looking - they react to what they think is going to happen in the future.
Every time the Federal Reserve has indicated its going to lower rates and print more cash (i.e. cook up the perfect recipe for inflation), Bitcoin has skyrocketed (ahead of time).
Remember BTC's run up to $69K?
That came after the Fed announced it planned to lower rates and turn the money printers on, in order to battle the COVID market crash.
Bitcoin's subsequent crash back down to ~$16K?
That came after the Fed announced last year, that it was raising rates and stopping the printer, in order to battle inflation.
The through line?
When the market is told to expect inflation: Bitcoin pumps.
Is this a direct cause, or a random correlation? No idea.
But it's worth noting, because ever since the SVB collapse, the market has expected the Fed to start lowering rates and letting inflation climb again.
...right on cue, Bitcoin is up $8K in ten days.
And Pomp isn't the only one who shares this opinion.
Balaji is so convinced we're about to see a $1M Bitcoin (as a result of hyperinflation 😰), he's placed a million-dollar bet on it.
Not a trade. A bet. With this guy:
The terms are as follows:
→ Jimmy Medlock buys 1 BTC.
→ If in 90 days, hyperinflation hasn't pushed BTC to $1M per coin, Balaji has to pay ol' Jim $1M USD. Vice versa? Jim owes Balaji the $1M.
And, ah...Balaji is making his warning of hyperinflation painfully clear, saying (screaming?):
It's happening now
It'll be fast
Buy Bitcoin
Get your coins off exchanges
Send the #BitSignal
Big/scary call!
That said, it's worth remembering, Balaji (while a big name in the tech/crypto space) is just another guy on Twitter with an opinion.
Nothing is set in stone.
(We hope he's wrong!).