The full post is available to paid members — enjoy a free preview of today’s content! How economic outcomes cause bitcoin outcomesIs a stock market rally positive for bitcoin? What about a housing market crash?Dear Readers, As a bitcoin research firm, constant macroeconomic analysis is conducted because bitcoin represents a mirror for the legacy system. Why bitcoin goes up and down in the short term is driven by many idiosyncratic factors, including the direction of the stock market. But on a longer-term basis, we believe bitcoin increases in value due to the understanding that further money creation by governments and central banks is inevitable. For this reason, every time we sense a money creation policy response, the whole case for bitcoin to occupy the portfolio theoretically increases. One might isolate our letter today on US residential real estate and think: 1) home prices decline, 2) the economy goes into recession, 3) stocks go down, and 4) bitcoin goes down. We, on the other hand, think something more like: 1) home prices decline, 2) Congress moves to shore up Fannie/Freddie, and the Fed becomes unable to exit the mortgage-backed securities market, 3) fiscal and monetary accommodation set the government on a path to higher deficits and the Fed to expand its balance sheet, and 4) investors around the world rush to bitcoin in response. Individual economic outcomes each cause short-term market movements, as a change in conditions can affect yields and trickle into every asset class. They also affect the long-term path, and most notably in terms of problems in the financial system, boosting the global case for bitcoin as a non-banking, non-government instrument. In summary, there are many things that worry us about the economy, but most of them end up favorable for the digital asset with mathematically precise and energy-bound scarcity. River is our Bitcoin exchange of choice. Securely buy Bitcoin with zero fees on recurring orders, have peace of mind thanks to their 1:1 full reserve multisig cold storage custody, and withdraw at any time. Need help? They have US-based phone support for all clients. Now introducing River Link 🔗allowing you to send Bitcoin over a text message that can be claimed to any wallet. Give a gift, pay a friend for dinner, or orange pill your friends, completely hassle-free. Use River.com/TBL to get up to $100 when you sign up and buy Bitcoin. Today’s topics
Jerome Powell and the TBL researchers: Redfin surfing...Subscribe to The Bitcoin Layer to unlock the rest.Become a paying subscriber of The Bitcoin Layer to get access to this post and other subscriber-only content. A subscription gets you:
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Thursday, June 27, 2024
How economic outcomes cause bitcoin outcomes
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