You cannot be so easily fooled can you? Inflation is not something that just goes up and down it is permanent, you cannot take inflation out of the current centralized monetary system and anyone who really believes you can is a moron.
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Hey look, this govt funded entity posted statistics to make it appear as if inflation is going down!!
You cannot be so easily fooled can you? Inflation is not something that just goes up and down it is permanent, you cannot take inflation out of the current centralized monetary system and anyone who really believes you can is a moron.
You cannot be so easily fooled can you? Inflation is not something that just goes up and down it is permanent, you cannot take inflation out of the current centralized monetary system and anyone who really believes you can is a moron.
That's by far not expected. Institutions have more likely (and bigger amounts too) liquidity saved to buying at bottom whatever they can (usually competitors, but Bitcoin is also very appealing at this price).
Institutionals, represented by various banks and funds, will definitely not miss the opportunity to buy at the bottom of the market. As soon as central banks release liquidity to the markets, buying will become more tangible.
Ooohhh, so sorry. I've fixed now my other post too. It was a typo there. I meant "That's by far not unexpected."
I hope now it makes more sense. Yes, they started buying and as the bullish trend becomes something beyond doubt they're expected to increase their sales. We're on the same page
My point is that each halving has lower fundamental impact. In about 100 years we will cut mining rewards from 2 sats/block to 1 sat/block (the very last halving). I don't think that price will double thanks to this only because miners rewards are getting cut by half (from 0.00105 BTC/ year to 0.000525 BTC/ year while whole supply is 21M). At that day no one will care about halvings. I thinks we have 0-3 halvings left that will have any impact on price. Although i know its not very popular statement in crypto community.
You're right about the far future, but we're not there yet. The amount obtained from tx fees is still small compared to the block reward. And will still be so after the next halving.
3- the fact that hasrate has to go up. In fact it dosn't. We can be at the top of first hashrate cycle and now a decade going sideways.
The advance in technology still happens. Intel has entered the game and I think that they've made a much more comprehensive research than you and me. And if this step is expected by them to cover the costs and also bring them very good returns, that means that the hash rate will still grow in the near future. So again, your logic may be right for a farther iteration, not for now...
While for short term I cannot argue, I don't think that it'll go too high this year (and whether the high point will be in May or later I don't know), on long term (decade) you seem to have missed the halvings and the ever increasing difficulty; this cannot be sustained for 10 years only with max 60k price (and usually lower).
This is correct if we assume some variables are constant.
1- mining efficiency thanks to Moore's law. Its no longer double each 2 years but its still an exponential grow. We can have slowly growing hashrate without price going up. Mining efficiency is not constant.
2- demand stays the same so price have to go up when supply goes down. But demand is not a constant and supply goes down a little % of a whole supply. Its not like during first/second halving:
1st halving reduced monetary inflation from 25% to 12%. Second halving reduced monetary inflation from 9% to 4,5%. Now we are getting closer and closer to the 4th halving that will reduce bitcoin monetary inflation from 1.5% to 0.7%. Both numbers are negligible compared to 8% official CPI in US, 10% in EU or 80% in countries like Turkey. Halvings fundamental impact on bitcoin price is getting lower and lower with every next halving in oppose to macro data, FED decisions, interest rates, recessions and of course ADOPTION.
My point is that each halving has lower fundamental impact. In about 100 years we will cut mining rewards from 2 sats/block to 1 sat/block (the very last halving). I don't think that price will double thanks to this only because miners rewards are getting cut by half (from 0.00105 BTC/ year to 0.000525 BTC/ year while whole supply is 21M). At that day no one will care about halvings. I thinks we have 0-3 halvings left that will have any impact on price. Although i know its not very popular statement in crypto community.3- the fact that hasrate has to go up. In fact it dosn't. We can be at the top of first hashrate cycle and now a decade going sideways.
I found an interesting infographic for 2022, which shows the inflation rate in different countries:
An article for countries with highest inflation rates, double digithttps://www.visualcapitalist.com/mapped-which-countries-have-the-highest-inflation/
A global recession is something that is bound to happen, I think. I think the Fed also saw the market reaction and they also have done something related to the global recession. At this time we have seen how the economic impact and how the world economy is currently. I have seen many people who have experienced difficulties and many workers who have lost their jobs. The market on a micro scale has been moving very slowly and that has made economic turnover in the wider community also run slowly. I don't know how the impact of recession and inflation will be on the macro scale like multinational companies but on a small scale I see it that way. People seem to be struggling to survive.
People are mad with their minds and reactions.
Last year, they were fearful about FED and their decisions.
This year, they are fearful about recession.
Inflation problems should be seen a few months after the pandemic when many governments poured the global market with their huge QEs but people just denied that fact. They waited many months later to start feeling fearful that is lagging.
From what FED did, I think they don't do anything quickly after one night. Before they launch something, they try to test market reactions with fud and they will vaguely talk about their probable plans for near future. They did it before increasing interest rate and they're testing market reactions again before they decrease interest rate. Sooner or later they will do it, maybe more than next 6 months but it's not a matter for Bitcoin diamond hands and real hodlers.
Last year, they were fearful about FED and their decisions.
This year, they are fearful about recession.
Inflation problems should be seen a few months after the pandemic when many governments poured the global market with their huge QEs but people just denied that fact. They waited many months later to start feeling fearful that is lagging.
From what FED did, I think they don't do anything quickly after one night. Before they launch something, they try to test market reactions with fud and they will vaguely talk about their probable plans for near future. They did it before increasing interest rate and they're testing market reactions again before they decrease interest rate. Sooner or later they will do it, maybe more than next 6 months but it's not a matter for Bitcoin diamond hands and real hodlers.
But to be honest i don't think its the most likely scenario. More likely one is that we will be stuck for a decade in 20-60k consolidation. Something in between seams to be the most likely one.
In short term I expect everything to be bullish until inflation hit short term bottom (next few months). Somewhere around CPI=2-4%. Is 2-4% possible? In my opinion it is. And inflation bottom (before new wave to new inflation ATH) should be around JUN and market high in APR/JUN. "sell in May and go away" should be a good strategy this year.
In short term I expect everything to be bullish until inflation hit short term bottom (next few months). Somewhere around CPI=2-4%. Is 2-4% possible? In my opinion it is. And inflation bottom (before new wave to new inflation ATH) should be around JUN and market high in APR/JUN. "sell in May and go away" should be a good strategy this year.
While for short term I cannot argue, I don't think that it'll go too high this year (and whether the high point will be in May or later I don't know), on long term (decade) you seem to have missed the halvings and the ever increasing difficulty; this cannot be sustained for 10 years only with max 60k price (and usually lower).
Please edit and merge your posts instead of making consecutive ones. May worth reading the forum rules too.
The value of bitcoin can fluctuate, but it is not related to inflation. Rather, it is related to supply and demand, news and industry events. Some experts believe that because bitcoin is still in its early stages of development, its value could continue to rise in the future.
Interesting. And what you think Bitcoin price will do in this equation? Will it follow the other assets and will go down again big time?
Not every asset acted the same. So far everyone is looking at inflation, interest rates and sp500/nasdaq as next bitcoin move indicator so I used SP500 in above post. But interesting thing happened to gold during "The Great Inflation" 1965–1982. In 1971 Richard Nixon depeg USD from gold and gold had the biggest pump ever. From 35$ to 900$ in a decade (while stocks were going sideways). If the same would happened again and bitcoin would fallow gold we could see a pump to 1 mln $ (x30 from now). But to be honest i don't think its the most likely scenario. More likely one is that we will be stuck for a decade in 20-60k consolidation. Something in between seams to be the most likely one.
In short term I expect everything to be bullish until inflation hit short term bottom (next few months). Somewhere around CPI=2-4%. Is 2-4% possible? In my opinion it is. And inflation bottom (before new wave to new inflation ATH) should be around JUN and market high in APR/JUN. "sell in May and go away" should be a good strategy this year.
https://www.statista.com/statistics/216037/monthly-percentage-of-change-in-the-cpi-u-in-the-us/
Annual inflation is close to sum of all candles. So we can see that each next month big candle goes away and new small one comes in. So to see official CPI increase in next months we need to have >.6% M/M change in FEB. >.8% in next month etc. So its likely to see an official CPI going down for at least next 3 months. 1 month flat and 2 more months down (if we will not see covid 2.0, nuclear war etc.).
The value of Bitcoin may fluctuate, but it is not related to inflation. Rather, it is related to supply and demand, news, and industry events. Some experts believe that since Bitcoin is still in an early stage of development, its value may continue to rise in the future. 
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I used to hear opinions that bitcoin helps in case of rising inflation, but this chart breaks this idea of the market, since during the growth of CPI, bitcoin also reacts negatively to these events.
The crux of the matter is that inflation does not equal CPI.
The CPI is designed to stop people from being outraged and protesting to their politicians.
What is not often mentioned about inflation is the important asset inflation part. Between 2010 and 2020 there was hardly any CPI growth in Europe while the banks were printing. Where did much of that money go: into assets, especially real estate, bitcoin and others.
Now the working classes are feeling the effects of the printing, and of other causes, such as the increase in the cost of energy, but before this period they were like the frog that is being slowly cooked and does not realise it, because whoever wanted to buy a house in 2019 cost them much more economic effort, counting in terms of net annual salaries than their parents' generation, and that is when interest rates were much lower in 2019 than in the 80s and 90s.
I watched the latest reports on crypto investments and found that the main purchases of the same bitcoin occur at the expense of institutional ones. That is, the growth from 15k to 25k that we are now seeing can be called institutional, as in the second half of 2020.
That's by far not
Inflation is slowing down because we are in recession and due to bull whip effect. Definitely not because of "soft landing"
My economics background is not strong enough to check this. Whether the recession is avoided (again: for now) or we're in deep sh#t and they're covering it, I don't know and I guess that there are (oh, so) many in this situation (of not knowing the difference).
Exactly the same we have now. Inflation is going up, assets are going down, people predict the worst-case scenarios. Inflation goes down, assets pump people wait for FED pivot not buying the bottom. Inflation reach short term bottom, FED do pivot, retail buy the local top. Inflation goes up, assets goes down, retails are broke.
Interesting. And what you think Bitcoin price will do in this equation? Will it follow the other assets and will go down again big time?
Edit: fixed typo
Can it be maybe also the fact that the inflation slowing down can be a sign that the recession was - at least for now - avoided and everybody starts putting to work the liquidity they may have been keeping at hand for the dark days?
Plus, the trend is pretty clear now, which can increase the appetite of the investors.
Plus, the trend is pretty clear now, which can increase the appetite of the investors.
Inflation is slowing down because we are in recession and due to bull whip effect. Definitely not because of "soft landing"
1970-1980 was very similar. Thats how asset prices (SPX) reacted to inflation back then.
in 1970 we had first inflation peak (market hit bottom 2 months later)
in 1972 we had inflation short term bottom (market reach new ATH 3 months later)
in 1974 we had new CPI peak above 12% (market created new low eacly in the month of CPI peak)
Than, >1975 market just stop gamble inflation data and ignored next inflation peak but pumped like crazy as it was going back down.
Exactly the same we have now. Inflation is going up, assets are going down, people predict the worst-case scenarios. Inflation goes down, assets pump people wait for FED pivot not buying the bottom. Inflation reach short term bottom, FED do pivot, retail buy the local top. Inflation goes up, assets goes down, retails are broke.
Bitcoin is commonly considered as a possible safeguard against inflation, as it has a finite supply and is not controlled by any central authority. In contrast, inflation erodes the value of traditional fiat currencies over time, reducing their purchasing power. However, the correlation between Bitcoin and inflation is intricate and can be influenced by market volatility, and the effectiveness of Bitcoin as an inflation hedge is a topic of discussion among specialists.
I am also baffled by the relationship of CPI and Bitcoin. I never imagine how the thing with CPI can affect Bitcoin since most people never give a good reason that can explain the uptrend of Bitcoin is caused by the slow down of inflation. They just tell us that this thing happen so the price of Bitcoin is uptrending. Like where is the common root between the two?
Anyway I do think institutional investment has a huge contribution on the current uptrend of Bitcoin. Since with institution piling up demands on Bitcoin, it is obvious, with the supply and demand rule, that Bitcoin will surely uptrend because much money is coming in to eat the sell order and push the price of Bitcoin up.
Anyway I do think institutional investment has a huge contribution on the current uptrend of Bitcoin. Since with institution piling up demands on Bitcoin, it is obvious, with the supply and demand rule, that Bitcoin will surely uptrend because much money is coming in to eat the sell order and push the price of Bitcoin up.
I never heard about bitcoin price been affected by inflation either directly or indirectly, bitcoin price is extremely determined by the market demand and supply but what makes them both isn't the role of the inflation on the general parallel market, if we are to compare bitcoin as well with other commodities in the market serving as assets or trade items bitcoin is over beyond their control without being affected by what those centralized institutionizations have on their market price with bitcoin.
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