Bitcoin market, cycles & ETF flows
Timeline of BTC price action, halving-cycle milestones, ETF flows and correlations with macro liquidity.
central banks have rejected holding Bitcoin in their reserves including Fed, ECB, PBoC and many others
what would even be the purpose of a central bank holding BTC on their balance sheet? so that they can stabilize the value of the currency against Bitcoin? what would be the practical benefit from it now?
cross-border crypto trade in non-stablecoins is negligible. Bitcoin is extremely volatile, which would make central-bank issued currency more volatile - this goes exactly against the direct mandate of most central banks - price stability.
a more volatile currency will also lead to a more volatile bond market, which will make government funding more volatile, and thus a high risk/uncertain economy
and i'm not even going to touch on the security risks. okay, maybe briefly 😄:
➖ governments are one of the only entities that can realistically perform a successful 51% attack on Bitcoin. well, with central banks owning BTC will make such attacks much more attractive - including at the geopolitical level. the same goes for denial of service family of attacks
➖ what if the central bank's wallets get hacked/compromised? i'm not talking about quantum computers breaking RSA, but operational level mistake or compromise
so for the next 10 years, I view central banks holding Bitcoin on their balance sheet as a negative sign for their currency. of course, the protocol and the bitcoin network will evolve/change over time, and with so may my stance
i believe cryptocurrencies, and more specifically distributed layer technologies/blockchain architectures can bring immense value to our financial system as a whole, but that doesn't mean that we should have central banks speculating on that today. it makes much more sense to increase gold reserves instead
virtually every corporation that accepts Ethereum/Bitcoin for payments doesn't actually process the payment in crypto
they immediately covert it to USD or another FIAT, and not actually hold the BTC, ETH, etc
the convertion is generally done via an intermediary, so the company you're buying never even touch or care about the crypto asset. they want the same government-backed currencies that we use now
the intermediary will also generally charge a fee, around ≈1% of the transaction value. so buying directly with crypto is likely to be more expensive than directly with FIAT. if you just sell the crypto for FIAT and pay directly in USD, EUR, etc it will likely be cheaper. so what's the point of paying more?
don't be fooled by headlines or articles that suggest otherwise
when mega caps like gold explode by ≈50% in a year and you don't think that that's a warning sign for US equities/risk asset - you probably should look back at history 😄
Bitcoin and Intel have do have one thing in common - direct monetary intervention from the US government
you can read the full article/thread explaining why September is generally a bad month for Bitcoin and other cryptocurrencies here: https://illya.sh/threads/@1755867104-1.html
my article on repo rates and BTC price was referenced on bitcoin.com
apparently it's been there for a month, but i only noticed now
it's a short read - and explains the negative price pressure that quarter-ends, and especially September bring on the price of liquidity sensitive assets like Bitcoin
it give you a concrete perspective on the current cryptocurrency price dump, even with decreasing funding rates
my article on repo rates and BTC price was referenced on bitcoin.com
apparently it's been there for a month, but i only noticed now
it's a short read - and explains the negative price pressure that quarter-ends, and especially September bring on the price of liquidity sensitive assets like Bitcoin
it give you a concrete perspective on the current cryptocurrency price dump, even with decreasing funding rates
this is one of the reasons why September is historically a bad month for Bitcoin
repo rates increase and borrowing decreases in quarter-ends
this includes the upcoming month of September. in addition, September 15th the corporate tax limit in the US
this reduces global liquidity, so asset prices tend to fall
