Everything is fuel. However, here is the thing. What is it fuel for? Stocks are held up by the central bank. Monetary policy is now quantitative easing which keeps interest rates low. Next year, after a year of massive money printing, we predict it will become quantitative tightening. Quantitative tightening will allow interest rates to go up. If and when that happens in late 2021 or 2022, higher interest rates will crash real estate and stocks! Inflation starts out with a stock and real estate melt up, then a crash. This fuel feeds hard money. Hence, Bitcoin IS that hard money. Ask yourself, why is Bitcoin the ONLY crypto currency that works on a stock to flow model? We keep bringing this up in every blog. Here is why. Stock to flow measures total supply of the money in circulation, then divides it by annual flow (supply). If a money cannot hold up on a stock to flow model, it will become a Inflationary currency. It will lose it’s value. See the US dollar. Gold and Silver hold up on a stock to flow. However, central banks across the world have been hoarding Gold and using paper derivative contracts to keep the price suppressed. Bitcoin CANNOT be manipulated to that extent, because central banks can’t hoard it all. Retail demand is so high, that central banks would have to take the Bitcoin from long term holders in retail. We refuse to sell our Bitcoin to central banks, much less institutional investors trying to control it. Bitcoin is the people’s money. It brings freedom. It is humanitarian. So, as we have written before on previous blogs, every other asset is devaluating against Bitcoin on a 12 year chart. Remember, Bitcoin started in 2009. Gold, Silver, USD, every currency in the world, S&P500, Nasdaq, Bonds. They ALL devaluate against Bitcoin. Altcoins are even worse. They devaluate against Bitcoin. Here is the one Altcoin we used to own, Ethereum against Bitcoin. Have a look:
This is the alltime ETH/BTC chart, click here to view.
Notice that over a 4 year cycle, ETH peaks and falls when priced in Bitcoin. It does appear to be the most resilliant Altcoin. However, it has no decentralization, and no scarcity. Thus, we believe it will always simply peak until Bitcoin takes off and goes on a bull run again, then ETH/BTC will fall back to the median range again. Short term, it works. But long term, Bitcoin prevails against Ethereum!
Below we see a chart on realized capitalization in Bitcoin. This level Bitcoin is stuck in now, is 2.5 months long and by the end of May, it will be 3 months of consolidation and re-accumulation. Then, Bitcoin will hit the next leg up. Bull runs last 18-24 months consistently, after the halving. The last halving was May 11, 2020. This bull run will last 4-8 more months. Plus, when observing realized capitalization as the chart below shows. This bullrun could reach levels that would surprise the most bullish of us. North of $500,000! We don’t really expect this, but it is possible because of the wall of money we keep bringing up:
Here is a chart showing the re-accumulation phase we are stuck in right now:
The next leg up is coming. Bitcoin won’t stay here. It cannot stay here. It has to grow, because it is sound money. Because it has accumulated $250billion in realized capitalization since this re-accumulation phase started in February. Most importantly, institutional investors, central banks, pension funds are not going to invest in uncapitalized, illiquid Altcoins. The next chart is logarithmic and shows the weekly candles climbing the wall of money, coming in to Bitcoin:
Bitcoiners have to wait on the launchpad for the remainder of the wall of money to come in. The funding for the next leg up. Altcoins can have their fun. Bitcoin is real money, it cannot be hoarded and controlled with paper contracts like Gold. It does not have a tiny group of stakeholders who could dump it at any time. Bitcoin is moral money that has already stood the test of time. Trust it. Below is a good article on the morality of Bitcoin, click here to read.
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