Bitcoin (BTC) and hyper-inflationary beginnings

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We are heading towards a serious economic crisis. If Bitcoin’s stagnation is to be believed, few seem to be preparing for it. Still, the big reset (hyperinflation) has kicked into high gear since the invasion of Ukraine.

Weekly report summary chained by GlassNode

First of all, remember that we cannot predict the future from old past price curves. Only fundamental analysis can tell whether to go “long” or “short” on anything.

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analysis chained it’s not a crystal ball either, although it’s good to get some information. In this edition, GlassNode looked at these metrics:

  • Activity chained
  • most Hash rate
  • BTC amount showing a hidden loss or gain
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Activity chained It is an expression that combines many metrics such as block space usage (1MB), number of transactions per person, or transaction fees that increase when blocks are full.

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Overall, GN thinks it is “It’s hard to find many observations that show the number of Bitcoin users is increasing strongly”.

The number of traders curve remains in a bear market specific area (red channel) for BTC/USD. However, GN notes that: “296,000 assets per day are at the upper end of this channel and continued upward expansion will be constructive.”

Bitcoin: Number of Active Assets
Orange curve: two-week average of traders on chain

However, GN states that the bottom part of the number of active assets and transactions continues to increase, proof that the bitcoin network is still on the rise.

The other flagship metric of on-chain activity is low BTC block filling, which results in very low transaction fees. No wonder the number of payments on the Lightning Network has doubled in one year.

So everything is going according to plan and the drop in transaction fees should no longer be seen as a harbinger of a drop in BTC.

In another recording, GN highlights that miners are extremely enthusiastic. hash rate What records does it break? “Each block currently needs to generate 122. zettatas “Can we read it in the report? “This would be equivalent to making an estimate for each of the 7.938 billion people in the world. hashes SHA256, 15,500 billion times, every 10 minutes”.

hash rate It is estimated to be between 190 and 215 Exahash per second. This is about 20% more than the previous record just before the ban. BTC mining in China,” GlassNode also notes.

The minors are clearly bullIt is not surprising that their income (in dollars) “150% higher than the last one right after halve (May 2020)”. “Miners earn about $207 per person. exahash they secure the bitcoin network”.

[Il faut trois heures pour qu’un seul S19 pro génère un exahash, pour mettre les choses en perspective]

Bitcoin: Mining difficulty
Bitcoin hash rate

The last interesting metric of the report: hidden gains and losses. The chart below shows the number of BTC purchased at a price above the current price.

Pink curve: percentage of addresses in profit
Green curve: percentage of assets in profit (one asset can control several addresses)
Blue curve: BTC percentage in profit

We may see we’ve seen worse. 70-75% of BTC is currently showing a hidden gain. We are at levels that can suggest favorable conditions for a calm start to the bull market.

Bitcoin supply, assets and addresses in profit
BTC percentage in profit (70% to 75% of BTC are currently green)

But as GlassNode points out, the backlash is an opportunity for profit first and foremost for now, hence the recent failed breakup and the accompanying air pocket. The compelling flow of new users towards fuel demand is not yet in place.

Do we really have to wait for the next one? halveOr will double-digit inflation convince the hesitant?

Inflation, NASDAQ, Bitcoin

Prices in the US continue to rise, up 8.5% year-on-year. We are at the peak of 40 years. At this rate, prices will have increased by 50% in four years.

Frankly, this is far from the 8.5% target. How can this be when gasoline is at an all-time high, up 48% in one year? Without rents and real estate that seem to have increased by more than 20%.

It’s so simple. Just play on the average basket of goods taken into account in the calculation. For example, transportation expenses only make up 3.9% of the basket. Accordingly, what is doubtful when you know it Consumer Expenditure SurveyTransportation is actually the second-largest expense for the average American.

Countless accounting tricks allow us to get bladders for lanterns. The most symbolic is the “quality” effect. For example, the more efficient the computer processors, the lower the price of computers in the fictitious inflation computing world.

Inflation is actually 12% if we use the methodology of the 1990s, or even 17% with the methodology of the 1980s:

US real inflation
Real inflation figures in the United States (as an annual percentage)

The only asset that can protect against inflation is a liquid asset that is available in strictly limited quantities. The only one ticking both of these boxes is bitcoin. And it’s not gold that is slow and will increase in quantity as the price rises, as it encourages miners to dig deeper.

Same goes for Microsoft, Apple, Google etc. This also applies to the shares of large technological monopolies such as It is true that the NASDAQ is highly valued, but still the number of shares of Apple or Google is not limited. For example, there were 640 million shares of Tesla in 2010 compared to 1.1 billion shares today…

Speaking of the NASDAQ, its correlation with bitcoin is very close, which makes sense given that stocks of large multinational corporations are indeed liquid and desirable assets. BUT, don’t believe that if the latter falls, bitcoin should follow the NASDAQ.

But that’s what could happen soon. The world is heading towards a repeat of 2008, when the price was $150 a barrel and Fed rates were heading towards 5%.

At that time, the stock market fell more than 50% in 18 months. Conversely, gold will appreciate around 200% between June 2007 and June 2011. It took until 2022 for S&P to harvest 200%…

The economy recovered thanks to the US Shale oil revolution. Not to mention the fact that Russia is slowly turning off the tap, except that this unexpected oil dip has probably already passed its peak.

OPEC told the European Union on Monday that current and future sanctions against Russia could create one of the worst oil shocks in history, making it impossible to change Russian volumes.

Visiting the Belarusian cosmodrome, Vladimir Putin says sanctions will cause inflation ” unbelievable “ :

“If our partners make the situation worse, including in finance, insurance, shipping, it gets worse for them too. Food shortages or incredibly high prices in world markets will lead to famines in various parts of the world. This is inevitable and the next step will be a new wave of immigration, including from Western countries. »

All this is to say that we are sleepwalking into a crisis worse than 2008 and that this time there will not be a “shale oil revolution” to get the machine working again. As BlackRock’s CIO recently stated: “A new world order is coming for the stock markets”…

There’s a stock market crash on our doorstep, and only technology or fundamental stocks can succeed. We’re entering an era of decline. The economy is first and foremost a matter of physical flux, which the decline of fossil fuels will necessarily limit, whether we like it or not.

Growth isn’t a matter of jealousy or a “should”. It depends on the availability of physical resources, primarily oil, on which 95% of global transport depends.

Inflation looks dire and it would be a huge mistake to speculate on Bitcoin based on the belief that it has an unbreakable bond with the NASDAQ. 2022 BTC is the gold of 2008 and the monetary system of the 21st century.

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Source From: Google News

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