Latest News & Resources

Bitcoin – Why it keeps Going UP!

Yes, Bitcoin crashed from November through January.  Now it’s February and the price reversal has confirmed.  This next chart from Will Clemente shows futures perpetual funding rates are trending from negative to positive.   The price is trending up at the same time as it has done before.  As more volume on the buy side comes in, Bitcoin will surge.  Let’s watch this chart in February and March.  Should be interesting.  Here is the chart:


Neutral ATM - Bitcoin – Why it keeps Going UP!


Also, this next chart shows Bitcoin breaking through the three month descending wedge and then in the chart on the bottom the Nasdaq crashing, as Bitcoin surges.  Bitcoin has broken the coorelation to the Nasdaq, it has held for months now.  Here is the chart below:


Neutral ATM - Bitcoin – Why it keeps Going UP!


Notice the green arrow down on the lower chart.  The Nasdaq dumping, Bitcoin pumping and this trend is a week old.  Likely this will continue.  For how long, nobody knows for sure.  


The network effect, the number go up technology built in to Bitcoin has been very well discussed in our blogs.  We see it starting to appear in the first chart above.  If green candles appear in that future perpetual funding rate chart next week as well and they are taller into March.  We know we have a winner.  That would tell us, if it does happen, that Bitcoin has broken the Nasdaq coorelation.  This would give us more confidence this reversal will last a good while.  So far, it has not been a full week yet.  We just have to watch it.  Other reasons for Bitcoin to keep going up over a decade plus time frame, is global macro outlook globally.  All fiat currencies will have to print to fund the governments in G20 countries and this inflation will devalue smaller government currencies.  We expect many of these smaller governments will follow El Salvador’s lead and use Bitcoin as their legal tender.  The next decade will be very interesting indeed!  Here are some charts to show this.  US current receipts/GDP is the blue line, while current expenditures/GDP is the red line.  So the US Government is spending 140% over what it is taking in in tax receipts.  OK cool!  Here is THAT chart, from Lyn Alden: 


Neutral ATM - Bitcoin – Why it keeps Going UP!


Next we have total US debt as % GDP on the blue line, and T bill yield adjusted for CPI inflation.  So the US has 130% debt to GDP ratio, with -6.9% T bill yields, CPI inflation adjusted.  That is scary!  Yet, for any Government in that much debt, keeping yields that low (interest rates) allows cheap borrowing and with that much debt, it deflates the value of the currency.  The Government pays back the debt with devalued currency.  Combining cheap yields and high debt to GDP is terrible for the citizens, great for the Government.  It also creates wealth disparity by inflating assets like Real Estate and Stock.  Here is that chart, from Lyn Alden: