Bitcoin is growing, despite the growth of the dollar. The bad smell of techno-fascism that is in the air seems to be causing him a lot of sympathy lately. The renewed interest of the Iranian oil power in a stateless currency is also not new in this audacious format.
Bitcoin decorrelates with the Dollar index
Interestingly, in the last few days, we have seen the beginning of a decorrelation between the dollar and Bitcoin, as in recent months we have become accustomed to seeing only rises and falls.
But it seems that this paradigm is fading. While the dollar has been rising for weeks on the back of rising loan rates (to the highest level in a year), Bitcoin has already returned to 4% of its ATH (all-time high). What could be more normal in the end. Just think: The United States will default on its debt if borrowing rates rise too high, which would mean the death of the dollar.
Even if there was no shortage of liquidity in the United States, inflation would take care of it in a roundabout way by stealing everyone’s purchasing power. In other words, no matter what happens, Bitcoin is likely to be valued more, according to the principle: I win, you lose.
Imagine for a moment that this inverse correlation is being restored. For example, in the case of a sharp increase in borrowing rates in the United States, for a moment. Well, it turns out that the dollar can still turn to dust due to the increase in the price of a barrel. Since the dollar has a strong inverse correlation with oil, the dollar will sooner or later suffer from a good backlash.
By the way, the growth of black gold is a” diplomatic “ response from Saudi Arabia to Biden’s attempts to renew the nuclear deal with Iran. Indeed, let us not forget that the Islamic Republic is the sworn enemy of the Saudi Kingdom.
The price per barrel is currently approaching the $ 70 mark. Keep a close eye on the Biden administration’s diplomatic circus. The dollar may eventually stop growing altogether if oil continues to move towards the $ 100 mark. Which, in turn, would make BTC’s life a little easier.
Iran Mines Bitcoin
Tehran is well aware that Washington is pretending to want to negotiate. For two simple reasons:
His two closest allies (Israel and Saudi Arabia) are categorically against any negotiations. The first is afraid that one day an Iranian nuclear bomb will wipe it off the map of the world. The second is afraid of losing leadership in the Arab world. Not to mention that one day the Saudi people may decide to draw inspiration from Iran by replacing thousands of their princes with democracy.
The United States is perhaps even more hostile. The explanation can be summarized in one word: petrodollar. Yes, Iran refuses to sell its oil for dollars, which greatly annoys Uncle Sam.
The Iranians won’t change their minds, so Bitcoin seems like an obvious way to circumvent the US embargo (via the SWIFT network). The think tank closest to the Iranian presidency has just published a paper suggesting reaching 11% of the Bitcoin hashrate!
This is not the first time that Iran has resorted to the crypt. For example, five months ago, we learned that mining machines were installed at three power plants. Moreover, the central bank of Iran has added Bitcoin to its foreign exchange reserves.
This staggering figure of 11%, published by the Think Tank Center for Strategic Studies, should undoubtedly be weighed to explain the cost of the Cue Ball.
Yes, gentlemen, inflation is approaching.
The main reason for the recent hiatus in Bitcoin usage was probably the rise in real rates. That is, the yield on government bonds is deducted from the annual rate of inflation. For example, let’s say your life insurance money is invested in ten-year government bonds paying 0.1% per annum. Let’s say that inflation for the year was 2%. This means that the purchasing power of your savings has decreased by 1.9% in a year.
However, safe havens such as gold and Bitcoin, on which no interest is paid, have an advantage when rates are close to 0%, or even negative, as they are today. Conversely, hence the recent downturn in Bitcoin following unexpected rate hikes in the US (and Europe).
Wait a minute. It seems pretty obvious that the next (year-on-year) inflation figures in the United States will soon be appalling. Whatever happens in March and April, annual inflation will fall from 1.4% to 2.5% by May (base effect). And given the increase in the price of a barrel, we can bet that we can eventually see an increase of about 3.3%.
Then we’ll see the entire financial press screaming, “ Inflation is at its highest level since 2011.” Enough to literally crash real rates and give Bitcoin a new boost.
- The future president of the SEC (US financial policeman) on March 2 reassured those who still think that Bitcoin could one day be “banned”. Gary Gensler said that he does not want to ban cryptocurrency, but wants to “ensure proper protection of users of exchanges.”
- India’s finance minister also reassured everyone, saying that the government “does not turn a blind eye to cryptocurrencies.” In any case, countering BTC is a bad idea. Nigeria is living proof of this: the volume of trade in PTS increased by 15% in the month after its ban.
- Bitcoin was bought by another respected multinational corporation. Aker, a 180-year-old Norwegian oil company, bought it for $ 58 million. “We will be the holders,” its CEO said in a lengthy letter to shareholders. A beautiful irony.
- Finally, note that Bitcoin is becoming rarer on exchanges, which is a very good sign. Perhaps this is partly due to the fact that even miners keep their coins. This means that they expect the price of BTC to rise. The miner is smart. You must listen to the minor key.
In conclusion, the CEO of Binance said that many Asian multinationals already own Bitcoin without making it public. Oh, yes, the mayor of Miami is trying to pay federal taxes in BTC.
In short, everything is fine, even if the rise in short-term rates scares someone. Owning 20 BTC makes you a millionaire, and the Cue Ball is already worth 10% of the world’s gold reserves.