Hello friends,
In my last post, I explained to you all what backwardation is and why it is bullish. I also noted that bitcoin was not in backwardation anymore and so we had one less reason to be bullish on bitcoin. You can read that here:
For a while now, I have been saying that we are in a no-trade zone and that remains the case today. I would not be shorting bitcoin right now because of the low volatility and the fact that your downside is quite limited from this point. I will just wait for the next time to make a bullish trade.
.........
On a related note, I have been bearish the US stock market for months and it is starting to look like a recession is imminent. To understand how the economy works on an intuitive level, I would recommend you read this pdf by Ray Dalio: my.vanderbilt.edu/investmentanalysis/files/2011/08/A-Template-for-Understanding-Whats-Going-On-Bridgewater1.pdf
If the US economy is going to be in a recession, this means there will be less "credit" in the economy. This essentially means that there is less buying. Why? Because our economy is heavily dependent on debt. Just about every major business is started with vasts amount of debt. We are trillions of dollars in debt for college loans. We are a nation of debt.
As a result of our vast borrowing, their needs to come a time when the lenders come calling to receive their dues.
This is not tangential to bitcoin. Money must flow into bitcoin for its valuation to rise. Keep in mind, there will always a selling urgency of bitcoin due to taxation. There isn't a natural buying pressure that I am aware of. You might say that bitcoin being deflationary is a natural propping force, but that's not true. Bitcoin is inflationary currently at about 3% per year. One day it won't be, but for now it is. The second derivative of the supply is negative (supply increases by a decreasing percent each year), but the first derivative is positive (the supply increases each year).
My opinion, and I hope I am wrong, is that the price of bitcoin will correlate with the health of the economy. With this model, it gives me a bearish outlook on bitcoin.
.........
With all of this said, I am not bearish on bitcoin. I am just sharing an economic bear perspective because we all need to be prepared for every possible outcome.
Good luck everyone, I hope we all make it to the other side...
-YoungShkreli
In my last post, I explained to you all what backwardation is and why it is bullish. I also noted that bitcoin was not in backwardation anymore and so we had one less reason to be bullish on bitcoin. You can read that here:
For a while now, I have been saying that we are in a no-trade zone and that remains the case today. I would not be shorting bitcoin right now because of the low volatility and the fact that your downside is quite limited from this point. I will just wait for the next time to make a bullish trade.
.........
On a related note, I have been bearish the US stock market for months and it is starting to look like a recession is imminent. To understand how the economy works on an intuitive level, I would recommend you read this pdf by Ray Dalio: my.vanderbilt.edu/investmentanalysis/files/2011/08/A-Template-for-Understanding-Whats-Going-On-Bridgewater1.pdf
If the US economy is going to be in a recession, this means there will be less "credit" in the economy. This essentially means that there is less buying. Why? Because our economy is heavily dependent on debt. Just about every major business is started with vasts amount of debt. We are trillions of dollars in debt for college loans. We are a nation of debt.
As a result of our vast borrowing, their needs to come a time when the lenders come calling to receive their dues.
This is not tangential to bitcoin. Money must flow into bitcoin for its valuation to rise. Keep in mind, there will always a selling urgency of bitcoin due to taxation. There isn't a natural buying pressure that I am aware of. You might say that bitcoin being deflationary is a natural propping force, but that's not true. Bitcoin is inflationary currently at about 3% per year. One day it won't be, but for now it is. The second derivative of the supply is negative (supply increases by a decreasing percent each year), but the first derivative is positive (the supply increases each year).
My opinion, and I hope I am wrong, is that the price of bitcoin will correlate with the health of the economy. With this model, it gives me a bearish outlook on bitcoin.
.........
With all of this said, I am not bearish on bitcoin. I am just sharing an economic bear perspective because we all need to be prepared for every possible outcome.
Good luck everyone, I hope we all make it to the other side...
-YoungShkreli
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.