We never had a traditional Bitcoin bull run post 2021, other than what was the result of ETF flows and fabricated political correlation by the usual hypemen. I am not sure what is so hard to understand about this.
Simplify your mental model: if a central bank does all the wrong things, Bitcoin goes up against fiat currency.
If a central bank does all the right things, even if they are temporary because the system itself is on a dead end road, Bitcoin will not go up materially against fiat currency.
This is just how currencies work. They all trade in pairs. Bitcoin has no God given right to increase in value, but it always will when the thing it is trading against is self-destroying.
Most of the 2010s we had interest rates near zero, a continuously expanding Fed balance sheet, the monetary base in terms of GDP rapidly expanding. They had their reasons of course (fear of deflation, etc.), but this was central banks purposefully blowing up their own currencies.
Since 2021 we have had interest rates in developed markets at 3-4%, the Fed balance sheet shrinking, the monetary base in terms of GDP shrinking. Central banks got spooked by inflation, which is the one thing that causes governments to be overthrown faster than a deflation-led sovereign debt crisis. And so, for a while at least, they started doing all the right things.
It's impressive that Bitcoin still developed how it did price-wise the last few years. Congratulations to the hypemen, the four year cycle maxis, etc. But it was unnatural.
We are now once again entering an era where the Fed will be making all the wrong moves. One of fiscal dominance. The balance sheet has started expanding and M2 will follow. Interest rates will come down despite inflation. Bitcoin will now naturally follow.
Simplify your mental model: if a central bank does all the wrong things, Bitcoin goes up against fiat currency.
If a central bank does all the right things, even if they are temporary because the system itself is on a dead end road, Bitcoin will not go up materially against fiat currency.
This is just how currencies work. They all trade in pairs. Bitcoin has no God given right to increase in value, but it always will when the thing it is trading against is self-destroying.
Most of the 2010s we had interest rates near zero, a continuously expanding Fed balance sheet, the monetary base in terms of GDP rapidly expanding. They had their reasons of course (fear of deflation, etc.), but this was central banks purposefully blowing up their own currencies.
Since 2021 we have had interest rates in developed markets at 3-4%, the Fed balance sheet shrinking, the monetary base in terms of GDP shrinking. Central banks got spooked by inflation, which is the one thing that causes governments to be overthrown faster than a deflation-led sovereign debt crisis. And so, for a while at least, they started doing all the right things.
It's impressive that Bitcoin still developed how it did price-wise the last few years. Congratulations to the hypemen, the four year cycle maxis, etc. But it was unnatural.
We are now once again entering an era where the Fed will be making all the wrong moves. One of fiscal dominance. The balance sheet has started expanding and M2 will follow. Interest rates will come down despite inflation. Bitcoin will now naturally follow.