josip_gnc on Nostr: Bitcoin is in high correlation with liquidity, however, I believe that the absolute ...
Bitcoin is in high correlation with liquidity, however, I believe that the absolute price increases are over 90% influenced by halving.
The reason why global liquidity has a low causal relationship to the total increase, but does correlate strongly to BTC price is because of how small fraction of total supply is chasing Bitcoin.
We can have brutal deflation and still if just 0.1% of the system wants to go to BTC, the price will brutally increase and vice versa.
We are looking at two systems that interact with each other but have vastly different amounts of liquidity, oders of magnitude differences.
That is why common analytical tools offer very little predictive capabilities.
Meanwhile something like housing market which is paired to the credit system almost 1:1 is very very easy to predict.
And it is easy to predict because the system is so big that the predictions cannot be priced in as soon as information is here. Even if we all knew what was going to happen with credit, bonds, housing market etc. in 1 year, it would be impossible for us to price it in immediately because of how much time is needed to produce these moves in real world.
That is why credit/housing system is inefficient and Bitcoin is very efficient. One can be predicted and you have months to act and the other cannot.
Housing can go parabolic long term but it can never ever go up 10x within a year unless the system breaks down completely.
The reason why global liquidity has a low causal relationship to the total increase, but does correlate strongly to BTC price is because of how small fraction of total supply is chasing Bitcoin.
We can have brutal deflation and still if just 0.1% of the system wants to go to BTC, the price will brutally increase and vice versa.
We are looking at two systems that interact with each other but have vastly different amounts of liquidity, oders of magnitude differences.
That is why common analytical tools offer very little predictive capabilities.
Meanwhile something like housing market which is paired to the credit system almost 1:1 is very very easy to predict.
And it is easy to predict because the system is so big that the predictions cannot be priced in as soon as information is here. Even if we all knew what was going to happen with credit, bonds, housing market etc. in 1 year, it would be impossible for us to price it in immediately because of how much time is needed to produce these moves in real world.
That is why credit/housing system is inefficient and Bitcoin is very efficient. One can be predicted and you have months to act and the other cannot.
Housing can go parabolic long term but it can never ever go up 10x within a year unless the system breaks down completely.