krisadams on Nostr: Friend just asked what are the leading indicators of a bitcoin run, like we’re ...
Friend just asked what are the leading indicators of a bitcoin run, like we’re seeing now. He thought the answer was useful so I’ll post it here too…
There are 3 leading indicators I watch for (but there’s really only one 🤔):
Adoption: As more people adopt bitcoin, it causes price to go up. Adoption is simply additional demand, whereas the supply is fixed at 21 million coins that will ever exist.
Having events: every 210,000 blocks the number of coins awarded to a minor for winning a block halves. That means the supply of new coins coming into the market halves. If demand for bitcoin remains the same, the price will run up until supply and demand equalise. Typically, large upward price moves start around six months after a halving. The last having was in April 2024. These large moves bring awareness and, with it, more adoption.
Global liquidity: as central banks print more money or reduce rates to allow banks to lend more, bitcoiners will borrow cheap money and buy more bitcoin. It’s essentially a derivative of adoption, if you think about it. Other than that, because there is more money coming into the global fiat monetary system, it will find its way to assets as a store of value. Most of the assets in the world are price-elastic, meaning that as they get more valuable people will create more of them. However, bitcoin is price-inelastic, because it is finite in supply, meaning it’s going to appreciate much faster than any other asset. These large moves bring awareness and, with it, more adoption.
Separate to those. There is also a growing awareness that the true state of an economy is deflation. It’s economics 101, as @JeffBooth would say. Humans will always innovate and make things cheaper across the world. It’s why our phones are now super-computers. It’s why travel went from walking,to horses, to wheel vehicles, to air flight, to space flight. More people are realising this and asking themselves “then why the hell do we have inflation?”
We have it because we run fractional-reserve banks and without monetary inflation (i.e. a lender of last resort to build them out) they will go bust! Why? Technology is driving GDP exponentially lower every year and so as more people lose their jobs, and businesses with debts go belly up, these debts are unpaid and the banks trend towards bust. Step in central bankers.
People are starting to realise that monetary inflation cannot ever stop, and is making them poorer year over year. As more realise this they’ll look for the solution and they will come to bitcoin. In doing so, they push-up adoption.
IT’S ALL JUST AN ADOPTION STORY!
Bitcoin is inevitable, the people that realise it the fastest are the ones that will be able to help their friends and family the most in future.
Bitcoin is the greatest humanitarian tool the world has ever been given.
There are 3 leading indicators I watch for (but there’s really only one 🤔):
Adoption: As more people adopt bitcoin, it causes price to go up. Adoption is simply additional demand, whereas the supply is fixed at 21 million coins that will ever exist.
Having events: every 210,000 blocks the number of coins awarded to a minor for winning a block halves. That means the supply of new coins coming into the market halves. If demand for bitcoin remains the same, the price will run up until supply and demand equalise. Typically, large upward price moves start around six months after a halving. The last having was in April 2024. These large moves bring awareness and, with it, more adoption.
Global liquidity: as central banks print more money or reduce rates to allow banks to lend more, bitcoiners will borrow cheap money and buy more bitcoin. It’s essentially a derivative of adoption, if you think about it. Other than that, because there is more money coming into the global fiat monetary system, it will find its way to assets as a store of value. Most of the assets in the world are price-elastic, meaning that as they get more valuable people will create more of them. However, bitcoin is price-inelastic, because it is finite in supply, meaning it’s going to appreciate much faster than any other asset. These large moves bring awareness and, with it, more adoption.
Separate to those. There is also a growing awareness that the true state of an economy is deflation. It’s economics 101, as @JeffBooth would say. Humans will always innovate and make things cheaper across the world. It’s why our phones are now super-computers. It’s why travel went from walking,to horses, to wheel vehicles, to air flight, to space flight. More people are realising this and asking themselves “then why the hell do we have inflation?”
We have it because we run fractional-reserve banks and without monetary inflation (i.e. a lender of last resort to build them out) they will go bust! Why? Technology is driving GDP exponentially lower every year and so as more people lose their jobs, and businesses with debts go belly up, these debts are unpaid and the banks trend towards bust. Step in central bankers.
People are starting to realise that monetary inflation cannot ever stop, and is making them poorer year over year. As more realise this they’ll look for the solution and they will come to bitcoin. In doing so, they push-up adoption.
IT’S ALL JUST AN ADOPTION STORY!
Bitcoin is inevitable, the people that realise it the fastest are the ones that will be able to help their friends and family the most in future.
Bitcoin is the greatest humanitarian tool the world has ever been given.