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Bitcoin dominates crypto with a familiar pattern

Also MicroStrategy getting ahead of its holdings and the parabolic growth of the US debt

Ecoinometrics

Mar 29

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Welcome to the Friday edition of the Ecoinometrics newsletter.

Every week we bring you the three most important charts on the topics of macroeconomics, Bitcoin and digital assets.

Today we'll cover:

Bitcoin dominates crypto with a familiar pattern.
MicroStrategy is getting way ahead of its Bitcoin holdings.
The parabolic growth of the US debt.

Each topic comes with a small explanation and one big chart. So let’s dive in.

In case you missed it, here are the other topics we covered this week:

If you aren’t subscribed yet, hit the subscribe button, to receive this email every week directly in your inbox:

Bitcoin dominates crypto with a familiar pattern

The Bitcoin dominance is the market cap of Bitcoin as a percentage of the total value of the crypto market. Right now the Bitcoin’s dominance sits at 53%. The second largest crypto asset, Ethereum is following at 16%.

The race isn’t even close.

That being said it is always like that. Bitcoin’s growth marks the start of a new crypto bull market. And the rest follows a bit later.

As a result Bitcoin is getting a smaller share of the crypto market over time, but the whole pie is getting larger and larger.

There is nothing to complain about here.

MicroStrategy is getting way ahead of its Bitcoin holdings

Since MicroStrategy converted from a business analytics company to a Bitcoin holding company its market cap has closely matched the value of the coins it holds.

Of course it fluctuates. In the heat of a bull market and with plans to raise cash to buy more coins MSTR gets valued above its Bitcoin treasury.

When the market goes down, during some corrections, uncertainty makes the relation shift in the opposite direction.

But most of the time those two things are in line.

Except right now they are totally out of line. MicroStrategy has never been so overvalued compared to the value of the Bitcoins they hold. That gap has to close at some point.

The US debt, it’s not getting better

Now while Bitcoin is going parabolic, the US debt is doing the same thing. That should not be a surprise. The parabolic trajectory has been building up for more than 50 years.

No one thinks the US debt will ever get under control. Deficit is destiny.

And the only way for the US to manage its debt over the long term is to continue debase the US$. The steeper the curve the faster the debasement. The path is clear.

No wonder people are looking for an escape with Bitcoin.

That’s it for today. I hope you enjoyed this. We’ll be back next week with more charts.

Cheers,

Nick

P.S. We need your feedback! We spend the entire week, countless hours really, doing research, exploring data, surveying emerging trends, looking at charts and making infographics.

Our objective? Deliver to you the most important insights in macroeconomics, Bitcoin and digital assets.

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