Bottom or Not Bottom for Bitcoin? Here Are Some Thoughts on the Matter.
Looking where you need to will help you see more clearly.
This issue of In Bitcoin We Trust Newsletter is for all subscribers. To get more insights on Bitcoin, you may be interested to upgrade to the premium package.
That's it, we are in September.
The unbearable lightness of the markets during the summer ended at the end of August in Jackson Hole when Jerome Powell wanted to bring all investors back to Earth.
The slight drop in inflation in America in July 2022 compared to June 2022 will not change the Fed's monetary policy strategy in the coming months.
Some seem surprised, but inflation was still at 8.6% in July 2022. Nothing indicates that the rate hikes made by the Fed in recent months will be enough to keep it falling.
Jerome Powell is therefore ready to continue with 75 basis point rate hikes as long as it is necessary. And that is even if it risks turning the technical recession America is in into a real recession. Everything must be done to cool down that was overheated due to the ultra-accommodating monetary policies adopted by the Fed and the other major central banks since the beginning of the COVID-19 pandemic in March 2020.
Thus, the party is well and truly over for the S&P 500 which has just fallen back below 4,000 points. During this summer when all dreams seemed to be allowed, the S&P 500 had even made a comeback above 4,300 points.
Since a minority of Bitcoin market participants understand the reason for Bitcoin, it is not surprising to see the price of Bitcoin falling as well. The correlation between the S&P 500 and Bitcoin continues to be very strong. This is the risk when a lot of traditional financial players enter a market like Bitcoin.
The fears of these investors are reflected in the price of Bitcoin, even though the fundamentals of Bitcoin have not changed, and the value proposition of Bitcoin is still the same. That's why I keep accumulating more BTC at every opportunity.
But some people are still scared with the price of Bitcoin hovering around $20K right now. You know the big question on everyone's mind right now: has the price of Bitcoin reached its bottom in June 2022 at $17.6K?
I will try to give you my feeling on this question.
No guarantees as always, just an opinion. But since you have been following me for a long time now, you have understood that the only guarantees that Bitcoin can give you are in its protocol, not in its price. That depends on the general public's awareness of what Bitcoin is and why it represents the future.