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:
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 is crashing! Again…I can’t resist posting this. Because today March 15 has seen Bitcoin go from $72k all the way down to $65k (a -11% amplitude from high to low). And that was enough to get tons of people writing article asking if “the Bitcoin bubble is bursting”. Steady lads… On the chart below I’m plotting the distribution of daily high to low amplitudes for Bitcoin. I’m only focusing on the last four years. For reference those last four years have been some of the least volatile Bitcoin has known. Today’s move is the orange line for comparison. Spoiler alert this is a big move, but definitely not exceptional. Definitely not worth spending the whole day thinking about it. Stay focused on the big picture.
What makes Bitcoin go up? Don’t overthink it.Which brings us to this second chart. The big picture chart. What makes Bitcoin go up these days? There is a lot of demand from the ETFs. More than 200k BTC captured by the ETFs since the launch. And since February the demand has been incredibly stable. The cumulative net flow is basically going up in a straight line. As long as that lasts ther is no reason for Bitcoin not to higher. Sometimes it is that simple.
The transitory nature of inflation.Do you remember the Fed’s narrative about transitory inflation? Me neither. Inflation has been transitory for so long it is all a blur. We have been in an elevated inflation regime for three years already. The Federal Reserve has basically used all its ammunitions and the best they have achieved is a plateau. What is it going to take to go back to the pre-COVID regime? And what are the chances that inflation starts moving higher when the Federal Reserve starts cutting rates?
That’s it for today. I hope you enjoyed this. We’ll be back next week with more charts. Cheers, Nick P.S. 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. Armed with those insights you can make better investment decisions. Are you a serious investor? Do you want to get the big picture to get on the big trades? Then click on the button below. Invite your friends and earn rewardsIf you enjoy Ecoinometrics, share it with your friends and earn rewards when they subscribe.
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Friday, March 15, 2024
Bitcoin is crashing! Again…
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