The money printing will not stop any time soon
There are some out there that think the stock market is on the verge of a major collapse.
However, I actually think the exact opposite is about to happen. It's going to soar.
You see, every time the Kool-Aid (QE and money printing) is taken away, the stock market throws a major temper tantrum, and the powers that be can't have that now can they.
We have seen this temper tantrum play out several times, even recently, and fortunately for all of us, bitcoin was not immune...
Check it out:
(Source: ~~~ embed:1275365484670713858) twitter metadata:MTAwdHJpbGxpb25VU0R8fGh0dHBzOi8vdHdpdHRlci5jb20vMTAwdHJpbGxpb25VU0Qvc3RhdHVzLzEyNzUzNjU0ODQ2NzA3MTM4NTgpfA== ~~~
But wait, didn't you just say "fortunately bitcoin was not immune"?!
Yes, yes I did.
You see, bitcoin is very much correlated with stocks at the moment and that will end up being a very good thing as we go forward.
*It won't be a good thing for those thinking that bitcoin was on the verge of replacing the dollar and upending the entire financial system as we know it, but for anyone that has really been paying attention that was never going to happen any time soon anyways.
The more likely scenario is continued money printing which props up asset prices, especially the stock market, that also spills over into bitcoin and helps send it to new all time highs as well.
The charts and correlations are undeniable...
(Source: ~~~ embed:1275108641763471361) twitter metadata:MTAwdHJpbGxpb25VU0R8fGh0dHBzOi8vdHdpdHRlci5jb20vMTAwdHJpbGxpb25VU0Qvc3RhdHVzLzEyNzUxMDg2NDE3NjM0NzEzNjEpfA== ~~~
As you can see, bitcoin and the S&P 500 have moved in a very similar fashion over the last decade and the correlation has only grown stronger these last several months.
The really interesting thing about the above chart is that PlanB on twitter has come up with a formula he likes to use to measure the valuation of the S&P compared with the value of bitcoin.
The formula can be seen here:
BTC = $3100^8.7e^-60 = $20K
(Source: ~~~ embed:1275108641763471361) twitter metadata:MTAwdHJpbGxpb25VU0R8fGh0dHBzOi8vdHdpdHRlci5jb20vMTAwdHJpbGxpb25VU0Qvc3RhdHVzLzEyNzUxMDg2NDE3NjM0NzEzNjEpfA== ~~~
Basically, it is saying that based on the current S&P price, bitcoin should be trading for $20k as of right now, based on historical trends.
Which likely means either the S&P is about to drop significantly or bitcoin is about to play some catch-up.
Given what we already have talked about above (QE and all the money printing), I am betting on the latter.
So, while some think the stock market is about to crash and burn, I think something like this is the more likely outcome:
(Source: ~~~ embed:1275422699385507842) twitter metadata:MTAwdHJpbGxpb25VU0R8fGh0dHBzOi8vdHdpdHRlci5jb20vMTAwdHJpbGxpb25VU0Qvc3RhdHVzLzEyNzU0MjI2OTkzODU1MDc4NDIpfA== ~~~
An explosion in asset prices that ultimately takes bitcoin along for the ride.
This explosion will most likely be coming from the debasement of the currency these things are priced in and not necessarily outright demand, though there will be plenty of that as well.
Buckle up, and enjoy the ride.
The good news about all of this is that we will likely be able to see if we are right in a relatively short period of time, something like the next 18 months seems like a pretty good window to me.
Stay informed my friends.
-Doc
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I hope you're right. Seems like you're pretty informed, I just read about QE impact on market in a separate youtube video recently too.
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I try to keep up to date on things. Hopefully I am able to pass much of that on to those that are following along.
incredible information ... hopefully this will become real ...
good job my friend :)
Thanks.
I have a question, if the value of bitcoin will go high does it necessary follows that the value of steem or hive will also increase?
no guarantees, but probably.
I'd personally bet more on Hive than Steem, given the stronger fundamentals.
I think the more exchanges the coin is on, the higher that likelihood becomes. Personally I still think we need to get HIVE on a couple more large exchanges and then it will be in a great spot for a bitcoin tag-along rally.
Historically when bitcoin goes up, it eventually pulls the valuation of most altcoins up with it. When bitcoin ran to $20k in late 2017, we saw just about every coin in the top 300 on coinmarketcap see 10x+ returns as well... No guarantees that it will, but I think the odds are good that if BTC breaks to new highs, altcoins will do well as well.
You are right I remember it was around 2017 when the value of STEEM and SBD goes up and a lot of people were happy. I wish it will happen again...Thank you sir!
I like it.
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Same here.
How can stocks rally in a time of economic turmoil? I wouldn't be so confident about a bullish scenario. Sure, the QEs are working for now, but will stocks keep rising when unemployment rates fail to recover, coronavirus cases continue to spike, geopolitical conflict continues to soar etc.? I am bullish on bitcoin long term as well, but I don't think it's 50/50 right now.
They will just keep printing. Thus far nothing has come up that the market doesn't think can be countered with massive amounts of QE. Should that something come up, you are right stocks and everything else will go down. But, as of now, markets don't think we are there yet.
I think the correlation is so big because people look for a heaven in corona for money. I think this can change fast and crypto can come in favor ( maybe not in volume but in correlation as beta factor).
Times are interesting with Corona and Money Brrrrrrrr
Yes they sure are. It will be interesting to see if the covid-19 epidemic will help or hurt bitcoin in terms of following previous post halving price cycles.
this is what planB was saying and I have to agree... we have the first red dot
Him and I share a very similar line of thinking on this...
my 2 sents ;)
https://peakd.com/hive-167922/@tobetada/crypto-analysis-or-a-word-of-caution-for-bitcoin
Good stuff!
I would counter that with saying that the majority of what I am talking about here is not necessarily talking about the near term price action but more of a general overall trend over the coming 18 months. If you have read some of my other bitcoin related posts you may recall that I have talked a lot about a dip to $7,600 being highly likely. In fact I am surprised it hasn't happened yet, based on historical patterns it likely should have by now. So, yes I could see a significant dip in the near term but it wouldn't change much about what I posted above. I think you buy that dip and we see $100k by the end of next year.
Many thanks Doc, that looks interesting - that BTC should be around $20k in correlation with stocks. I agree that price is due to head to new ATHs after the halving in the coming 18 months. $100k is an low estimate.
Yep, that is pretty much how I am viewing things as well. $100k seems crazy to think about considering we are having so much trouble at $10k. It will build slowly at first, then the final blow off top phase will take prices up very quickly.
Thanks for the reminder. Patience is everything for the hodler. And the peak may only last a few days as with the 2017 top. Add timing to the list of everything needed there.
It will take a while even if Bitcoin continues on the doubling curve. How many trillions of dollars in market cap does Bitcoin have to be before it gobbles up the legacy economy? At $8T it's on par with gold, at $80T it's on par with USD in circulation.
I'm guessing it needs to hit like a quadrillion dollar market cap before it absorbs everything. Based on the doubling curve that would take 12 or 13 years.
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Interesting!
Another fine article ... just getting positioned over here for whatever happens while watching Bitcoin literally create a huge red candlestick before my eyes this evening ... REFUSING to panic but just position instead...
Bonus points for NOT floating the fluff about Bitcoin and crypto replacing the present financial system anytime soon ... aside from the absolute catastrophe that would be for the the majority of the world not in the crypto space, such talk shows more hysterical hope of get-rich-quick thinking in cryptos than any sense of logic.
It's not stocks growing, it's $ inflating.
Bingo.