Topic: Federal Reserve Bank of New York Staff BTC Reports (Read 160 times)

A follower of the Bitcoin market can clearly see the decrease in the price of Bitcoin being affected by general news, whether economic or political, or even anti-Bitcoin statements.

We see, for example, that the recent statement of the director of JP Morgan Bank did not have any effect on the price of Bitcoin, while there were two negative statements made by him years ago that caused a lot of decline in the price of Bitcoin.

I think the impact of this news on Bitcoin is fading slowly and the most influential factor will be supply and demand and mining costs.

I believe they are wrong.
Bitcoin does indeed react to macro economics, actually it has been discussed in the past that Bitcoin can have some correlation to wall street performance,specially blue chip technological stocks.

Added to that, it is absurd they ignored how Bitcoin behaved during the beginning of the pandemic and to the news on the inflation or the alleged recession.

bitcoin doesnt follow FIAT economics
FIAT follows FIAT economics

bitcoin has its own economics

however things like ethereum dont right now
ethereum since last year does not have its own economics of price discovery/speculation. because not many are trading it. they have it staked up. so that leaves it with not much of its own price sentiment/speculation. and so when bitcoin was arbitraging the market pairs ethereum just shadow traced bitcoins price at a 1:14 rating. but the market movements were like for like (when btc went up eth went up when btc went down eth went down) ethereum didnt have much of a community independent niche view of its own value:premium sentiment. so it didnt break away from arbitrage orders

crypto currency has a whole different industry behind it and cost value premium and thus market speculation..
it cant be compared to the crap that fiat do that directly affect fiat markets

The disconnect between Bitcoin and macroeconomic fundamentals is a topic of ongoing debate and research in the financial industry. Some experts argue that this disconnect is due to the unique nature of Bitcoin as a decentralized and unregulated asset, while others believe that more time and data is needed to fully understand the relationship between Bitcoin and macroeconomic factors.

It is important to note that this report only used a short sample period and more evidence is needed to fully assess the disconnect between Bitcoin and macroeconomic fundamentals. Further research and analysis is needed to arrive at a definitive solution to this issue.

bitcoin didnt change due to covid ot the inflation news

lets take the new year change which you want to think is inflation

if you look at the months from about april-2022 december 2022
and view it as a year chart

you will see instead of normal "freemarket" movements of "volatility" like:
 \/\   /\      /\
     \/   \   /
            \/
it instead went  flat line for 1-8 week periods
 \/\   /\      
     \/   \__  
                \__
                     \___/
this is becasue of "futures trading"
whales were making BETS on futures markets for bitcoin that it will not go above X for that period. where by whales also ran some day-trade spot market bots to arbitrage the market pairs to cycle round to keep hitting at all the buy orders to stop the buy from pushing the price up
they then shifted their bets
by the end of december they stopped trying to keep it below $17k and let the markets do a bit of "freemarket" to allow the price to rise a bit and put in another resistance in at $21.5k and then $23k

as for the 2021 ATH. well that normal pattern of halving+1year
where
2012halving=2013 mining reaction and cost rise effect
2016halving=2017 mining reaction and cost rise effect
2020halving=2021 mining reaction and cost rise effect

when it comes to mining at the most efficient rate.. they do not respond to daily whims they pre-purchase hardware with 2 year life cycle and buy electric at the MW
amounts to cover 6-24 months supply. so they mone constantly no matter the situation
and so they only do their accounts, costings every ~12 months. which is why a year after the halving the most efficient miners are then costing up that previous years cost per coin to sell the min sell price for that years coin.
thus pushing up the price a year later
its this that sparks off the hype that results into a ATH

have a nice day

Well it depends really. It would be biased if they only analyzed BTC's price descent over the past year, in which case it would look really bad. I doubt they have super high tech crypto people on their team, but I wouldn't see it as a bad thing by itself.

how do we explain what happened when Covid-19 was declared a pandemic? At that point Bitcoin was mainly affected by this news, its is also applies when the Federal Reserve started to raise interest rates several weeks ago.


The lack of correlation comes because we are talking about a global market in which supply and demand are controlled from everywhere, and not markets subject to supervision, as in the stock exchange, when it is possible to stop trading when large changes occur.

I didn't read the whole article, just replied to the part quoted.

they have no clue..

firstly. lets give some examples

bitcoins market of 2011 was
$0.30-$30 due to things they have no clue of but are obvious if you think about it

it was not a wide window of  $0.000001-$100000 for good reason

firstly the non zero bottom is because mining in 2011 was higher then 20cents a coin. so no one wanted to sell for less than that. infact demand and enjoyment of market trading bitcoin meant it didnt go below 30 cents
it also didnt go way beyond $30 because of other common sense economics

if the most efficient GPU cost was say 20 cents on the planet
if the most in-efficient GPU cost was say $2 cents on the planet
and then laggers of CPU mining was say$40 on the planet

then no one would want to buy bitcoin above $40 if everyone on the planet can mine for less buy for less thus $40 would be "TOO PREMIUM" this is why it toped out at about $30

same rules apply as mining gear evolved
2013 jumped because that was the ASIC days

in 2021 the window was $10k-$75k
the market speculated inside this window at $30k-$68k

in 2022 the window was $15k-$95k
the market speculated inside this window at $50k-$16k

bitcoin reacts more so to mining costs and peoples local costs inbetween measuring is it better to mine to sell or buy to hoard

once market prices reach certain points (due to different peoples costs within the wide  window).. different regions change their sentiment from sell to buy.. or buy to sell

very few events can be categorically linked to news-media-fame-hype

mining costs increase over the years, coind for mining decrease and so the simple economics of cost per coin has the window range of ecomomics move up too

EG most in-efficient cost was $15k in 2022
EG most in-efficient cost was $95k in 2022
and the market moves around somewhere inbetween

not all countries have the most efficient electric cost so there are different ranges of resistances where buyers turn into 'mining to sell' this prices plateau and stagnate or top out at certain levels if all buyers for that hour, day, week run out

its called economics..
what that bank report shows is not economics.. but socioeconomics measuring social drama
and they wonder why they couldnt find a pattern(facepalm)

banks should fire any employee that cares more about social drama than actual math and number.. they are a bank, dealing in numbers, they are not facebook

Bitcoin market participants, especially the short-term traders, have noticed that Bitcoin wasn't strongly reacting to news that don't directly concern it, so they also don't react to them in the future. The cause and the effect are reinforcing each other.

I believe that right now the halvening cycles are the biggest factor for Bitcoin's price, and even years after the halvening the price fluctuation are the ripples of the previous rally and crash. But in 3-4 cycles halvenings will play smaller and smaller role, so maybe in 12-20 years Bitcoin will start having a different price pattern, like actually reacting to macroeconomic events.

I think that these 4 words can easily mean that the entire declaration made there holds no actual value and it can easily be considered unfounded and biased.
Of course, somebody has to be careful to this tiny detail and, based on his... views (or interests!) in the matter consider the report very good or plain useless.

Federal Reserve Bank of New York Staff Reports, no. 1052
February 2023
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1052.pdf
"Is macroeconomic news driving Bitcoin? In this paper, we conduct a systematic
analysis of the impact of macroeconomic and monetary policy news on Bitcoin’s
price. We model Bitcoin as an asset with no intrinsic value for which its current
price depends on the discounted value of its future price. In our empirical analysis,
we find that Bitcoin is unresponsive to both monetary and macroeconomic news. In
particular, the result that Bitcoin does not react to monetary news is puzzling as it
casts some doubts on the role of discount rates in pricing Bitcoin. Given the short
sample used in the analysis, however, more evidence is needed to assess the disconnect
between Bitcoin and macroeconomic fundamentals."