Bit Coin and Macro Theory
Actualizado
I am not doing any charts or lines or graphs or technical analysis, I am just going to give you the low down on whats going on and how IMO i dont believe btc will fall any time soon. This will all be in laymen's terms and simpler than normal break down. But it gets the gist across, as I don't want to bore you with the hardcore analysis I did as it hurts my head with the time spent on it.
1. Supply and demand, we all know many countries around the world are printing money like never before in human history, so what's this mean and how does it effect stores of wealth? Well lets start with the header, simple run down, the more of something there is the less value it holds, this goes for all fiat currencies, if more is printed the value drops and the way to hedge inflation is to drop interest rates to all time lows. Now I wont get into my macro theory here as its whats making me money, but understand that the value of btc is directly related to the weakness presented by fiat currently, now with the large supply of fiat in circulation there is a problem which is unique to the USA, the US dollar is used for 80% of all transactions in the world on a trade level its used as whats known as dollar backed trading, where the US dollar is a reserve currency around most of the world, why do you think the US can sanction places and no one goes against it? It because of the dollar being a reserve currency, now the problem with this is the devaluing of the dollar which is currently happening whether or not we feel the repercussions of it yet or not, and to be blind to it is not good.
2. Store of value, we all know store of value is important when trading if its stocks or cryptos or otherwise, it is what gets you into the game, to hedge your bets and make money. But like above if the US dollars belief as a store of value is to be determined we have to look at the underpinning value of it, as explained above value = scarcity , so again if there are more dollars in circulation then the store of value drops, where do you think people should go as the dollar collapses, what is one thing that has a finite supply, its not gold as new mines get discovered all the time, precious metals are in the same bag, silver, platinum, nickel, iron, and others can all be found and used even to the point of detriment to the earth, btc has a finite supply, there fore limited supply = scarcity = store of value
3. Charts and analysis for btc, every person has their belief in this or that when it comes to bitcoin but no one "LET ME REPEAT THAT" NO ONE can predict the price through technical analysis at this point as we have broken new ground and a new measure needs to be implemented to further track the rise or decline of btc, so lets take some of the above and apply it to our thinking, if a= fiat b= precious materials and c= cryptos then we need to break it down to its corresponding elements and how the interaction of those makes charts and analysis near worthless. as there are no historic markers for btc to prove definitively one way or another besides the rise and fall in 2017 we cant use the 2017 rise and fall as an example as even looking at the charts show the rises are not similar in structure or volume and are not pushed by a deflating fiat currency, so we need a bigger picture to the situation, now here comes the hard part about all of my work and thats figuring it out. '
4. Results of Burning up my brain, this one is long so be prepared , deflationary fiat, gold not having a cap, the rise of btc. If we look at these 3 factors and only these three as they are what directly links us to trade and not having to barter instead, we find that each one is related especially gold and fiat, first lets start with fiat, specifically the US dollar and History of the US treasury, during the Nixon era of US governance we saw the pull away from gold as the backing for the US dollar, now whats that mean you may ask, well lets dig in a bit, if gold is not backing the dollar then what is and the simple answer is the dollar backs the dollar sounds stupid right, thats because if the dollar backs the dollar then the only thing holding it where it is is the belief in its value and as money is printed with no backing the currency deflates and interest rates must be reduced to prevent downward pressure on the currency, now whats this mean if the dollar is used as the backing for most trades, it means you get less for every dollar you spend, and if the dollar makes up 80% of all international trade then I suppose you see the dilemma to fiat not backed by anything. So we move onto btc and its value based upon a hard cap and transactional value based upon nodes and upkeep of network , now i wont get into all the technical jargon behind how btc works or how btc is produced so i will give you a quick summation, btc is created as payment for those who ledger the transactions on the btc network ie the ones who are mining, they upkeep the nodes that put transactions where they need to be ie block discovery, now the more miners you have the more secure the network becomes as the ledger is held by all computational devices on the network at once, thus securely ensuring that there will be no rogue actions to create bitcoin where no transactions have taken place thus securing the network. Now with this fundamental knowledge we can move forward on whats going on now. With all the above mentioned info we can start to see a reason why btc is going up and why it wont be going down to 20 k or 18k or probably even down to 40 k any time in the future, let me paint you a picture, many companies rely on the dollar, the dollar is losing value, gold does not have a hard cap as we will always find gold whether its on earth or some where else as it is an element, we even have a little Au in our bodys every minute of every day just like lead, iron, zinc and all the other things that make up our world, with no hard cap on gold, what would store of value the best, an ever increasing supply of gold or a hard capped digital currency held together by the whole network. Now many big companys have been seeing btc as a store of value against the dollar and gold, it is why we have seen the uptick we have. Lets dig a bit here on why, well there is a couple reasons i will set right here for you, deflationary fiat, and gold , i get it i said those earlier but lets think about it for a second, as a big investor why would you go into gold for example when it has relatively been stable and you may see returns of 3% or would you go into something that from a technical stand point after adoption should not deflate due to outside forces ie government spending, money printing, war, and cant be controlled by an outside entity , well the answer becomes pretty simple, as with all companys the point is to grow the value of said company and if both the dollar and gold dont provide good returns on investment then why would you go into either.
Its all pretty simple to me and I know this article leaves a lot for you to fill in the blanks and I am sorry it does, i just cant have someone else figure out what I got going on as it is risky theory crafting and I dont want someone to possibly fall in and be like this dude got me all mucked up. If you have any questions or comments feel free to ask and I will answer questions through a private chat on fb or other network applicable chat. I got bored of typing this long drawn out stuff, so here this is what you get!
1. Supply and demand, we all know many countries around the world are printing money like never before in human history, so what's this mean and how does it effect stores of wealth? Well lets start with the header, simple run down, the more of something there is the less value it holds, this goes for all fiat currencies, if more is printed the value drops and the way to hedge inflation is to drop interest rates to all time lows. Now I wont get into my macro theory here as its whats making me money, but understand that the value of btc is directly related to the weakness presented by fiat currently, now with the large supply of fiat in circulation there is a problem which is unique to the USA, the US dollar is used for 80% of all transactions in the world on a trade level its used as whats known as dollar backed trading, where the US dollar is a reserve currency around most of the world, why do you think the US can sanction places and no one goes against it? It because of the dollar being a reserve currency, now the problem with this is the devaluing of the dollar which is currently happening whether or not we feel the repercussions of it yet or not, and to be blind to it is not good.
2. Store of value, we all know store of value is important when trading if its stocks or cryptos or otherwise, it is what gets you into the game, to hedge your bets and make money. But like above if the US dollars belief as a store of value is to be determined we have to look at the underpinning value of it, as explained above value = scarcity , so again if there are more dollars in circulation then the store of value drops, where do you think people should go as the dollar collapses, what is one thing that has a finite supply, its not gold as new mines get discovered all the time, precious metals are in the same bag, silver, platinum, nickel, iron, and others can all be found and used even to the point of detriment to the earth, btc has a finite supply, there fore limited supply = scarcity = store of value
3. Charts and analysis for btc, every person has their belief in this or that when it comes to bitcoin but no one "LET ME REPEAT THAT" NO ONE can predict the price through technical analysis at this point as we have broken new ground and a new measure needs to be implemented to further track the rise or decline of btc, so lets take some of the above and apply it to our thinking, if a= fiat b= precious materials and c= cryptos then we need to break it down to its corresponding elements and how the interaction of those makes charts and analysis near worthless. as there are no historic markers for btc to prove definitively one way or another besides the rise and fall in 2017 we cant use the 2017 rise and fall as an example as even looking at the charts show the rises are not similar in structure or volume and are not pushed by a deflating fiat currency, so we need a bigger picture to the situation, now here comes the hard part about all of my work and thats figuring it out. '
4. Results of Burning up my brain, this one is long so be prepared , deflationary fiat, gold not having a cap, the rise of btc. If we look at these 3 factors and only these three as they are what directly links us to trade and not having to barter instead, we find that each one is related especially gold and fiat, first lets start with fiat, specifically the US dollar and History of the US treasury, during the Nixon era of US governance we saw the pull away from gold as the backing for the US dollar, now whats that mean you may ask, well lets dig in a bit, if gold is not backing the dollar then what is and the simple answer is the dollar backs the dollar sounds stupid right, thats because if the dollar backs the dollar then the only thing holding it where it is is the belief in its value and as money is printed with no backing the currency deflates and interest rates must be reduced to prevent downward pressure on the currency, now whats this mean if the dollar is used as the backing for most trades, it means you get less for every dollar you spend, and if the dollar makes up 80% of all international trade then I suppose you see the dilemma to fiat not backed by anything. So we move onto btc and its value based upon a hard cap and transactional value based upon nodes and upkeep of network , now i wont get into all the technical jargon behind how btc works or how btc is produced so i will give you a quick summation, btc is created as payment for those who ledger the transactions on the btc network ie the ones who are mining, they upkeep the nodes that put transactions where they need to be ie block discovery, now the more miners you have the more secure the network becomes as the ledger is held by all computational devices on the network at once, thus securely ensuring that there will be no rogue actions to create bitcoin where no transactions have taken place thus securing the network. Now with this fundamental knowledge we can move forward on whats going on now. With all the above mentioned info we can start to see a reason why btc is going up and why it wont be going down to 20 k or 18k or probably even down to 40 k any time in the future, let me paint you a picture, many companies rely on the dollar, the dollar is losing value, gold does not have a hard cap as we will always find gold whether its on earth or some where else as it is an element, we even have a little Au in our bodys every minute of every day just like lead, iron, zinc and all the other things that make up our world, with no hard cap on gold, what would store of value the best, an ever increasing supply of gold or a hard capped digital currency held together by the whole network. Now many big companys have been seeing btc as a store of value against the dollar and gold, it is why we have seen the uptick we have. Lets dig a bit here on why, well there is a couple reasons i will set right here for you, deflationary fiat, and gold , i get it i said those earlier but lets think about it for a second, as a big investor why would you go into gold for example when it has relatively been stable and you may see returns of 3% or would you go into something that from a technical stand point after adoption should not deflate due to outside forces ie government spending, money printing, war, and cant be controlled by an outside entity , well the answer becomes pretty simple, as with all companys the point is to grow the value of said company and if both the dollar and gold dont provide good returns on investment then why would you go into either.
Its all pretty simple to me and I know this article leaves a lot for you to fill in the blanks and I am sorry it does, i just cant have someone else figure out what I got going on as it is risky theory crafting and I dont want someone to possibly fall in and be like this dude got me all mucked up. If you have any questions or comments feel free to ask and I will answer questions through a private chat on fb or other network applicable chat. I got bored of typing this long drawn out stuff, so here this is what you get!
Nota
Let me also add that the range bound consolidations of 2k range up or down has further cemented my theory, considering we see a range bound consolidation after each new high where we see a drop of up to 2 k and then a steady rise back to about 1 ish k down and then solid consolidation within those price frames to see a new all time high 2 days later, its indicative of the strategy announced at the Microstrategy meeting for institutional investors, buy small and in large batches, its why we have seen large upticks after consolidation as coins leave the market, many smaller purchases put little uptick in the market, but when the shorts come to short btc then we see a larger up tick because of the lack of actual coins on the market so shorts get swept out and the price inherently goes up as shorts get liquidated but only the smaller shorts get liquidated its an interesting theory and has imo been playing out since btc first breached 40 k, just go look at the charts an you will see what i meen, solid consolidation for 2 days with not real drop then bang next leg up. It is a bull market and will be such for some time to come at least a year or two we will see upside. This is my opinion and I am just a macro economic theorist soo take what ya can.
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