It is clear to us the US dollar is dying. Russia is now trading Oil for Rubles or Bitcoin. The petroyuan agreement between China and Saudi Arabia is being finalized whereby Saudi Oil will be traded for Yuan. The petrodollar is dead. No more trading oil for USD. Those days are now over, thanks to the recent sanctions against Russia. Here is Pipa Malmgren at the World Government Summit conference, explaining how CBDC will roll out to replace the USD, click here to view on twitter.
Last week our blog focused on the dangers of authoritarian control from CBDC. Too much meat, no vaccination, not enough boosters, too much fossil fuel usage, and access to your CBDC can be cut off instantly. It is centralized digital money. Whereas, Bitcoin is 100% decentralized. It is digital, but no central bank, or government controls it, and they cannot shut it down. Even without the internet, Bitcoin can still be mined using ham radios. Multiple governments have tried to ban Bitcoin, and it has caused it to gain in popularity. For example, China banned Bitcoin mining last year. Today, China represents 33% of all Bitcoin mined globally. Governments cannot stop it. Bitcoin is scarce due to the miner reward being cut in half every 210,000 blocks mined. It takes about 10 minutes to mine a block on the blockchain, subsequently, the production of Bitcoin is halved every 4 years or so. See this chart below, and think about what happens when CBDC is printed at will, just like fiat currency is today, and these draconian control policies become well known by the public:
Freezing access to digital money, controlled by the central bank will become a problem in the future. We are quite certain this will lead to a mass exodus from CBDC as a store of value. Gold will benefit some, but Bitcoin can be carried in your pocket, and in large quantities. Bitcoin will is a much better money than Gold. It is more scarce, and will have a higher deflationary number than Gold after the 2024 Bitcoin halving.
Another phenomenon with Bitcoin, is lengthening cycles. The 2021-2022 bull market cycle has outlasted past cycles, which will require the bear market accumulation period to shorten. See this chart below for details on what this would look like:
After the 2013 bull market cycle the accumulation phase took 20 months, then in 2017 it took 15 months, it appears this accumulation phase is ending in April, which is 12 months. All signs point to Bitcoin having a very good April. We have to keep in mind, however, that there is still no spot ETF approved by the SEC. Thus, future’s markets are still able to knock down Bitcoin when it goes on a run. Until the supply shock is severe enough that institutions can no longer get much Bitcoin due to high demand, this accumulation could last longer than expected. How many times did we see this come up last year? That is when the Future’s ETF was approved, and the Spot ETF, not approved yet. We see this issue as one that has prolonged the bull market, or even turned it into an accumulation phase. This explains why everything has been so delayed with the bull market since last spring. Spring 2021 to spring 2022 has been mostly sideways price action, ever since this Future’s ETF came out. Yet, we still see evidence and getting stronger, that the supply shock is getting worse and Bitcoin scarcity may begin taking over as a price driver. Another issue that effects Bitcoin’s price is the USD index (DXY). In this next chart, we see a shart drop projected, and another one in 2023. As the dollar weakens it sends investment and demand into Bitcoin. Here is the chart below: