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:
)https://twitter.com/100trillionUSD/status/1275365484670713858
- 100trillionUSD
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:
)https://twitter.com/100trillionUSD/status/1275108641763471361
- 100trillionUSD
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:
)https://twitter.com/100trillionUSD/status/1275108641763471361
- 100trillionUSD
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:
)https://twitter.com/100trillionUSD/status/1275422699385507842
- 100trillionUSD
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