Central bank delta fearful of catapulting bitcoin above US $ 50,000

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And in South Korea, the spread of delta variants has led traders to question whether the Bank of Korea will proceed with a rate hike reported on Thursday as policymakers seek to halt the soaring house price growth also seen in Australia. and New Zealand. In Japan, where debt yields are generally negative, there is speculation the government will try to extricate itself from a wave of the delta variant linked to the Olympics.

Bitcoin and liquidity

As the price of bitcoin moves in mysterious ways over the short term, long term all the data suggests that its value is tied to the extreme central bank policies of the past decade.

Holger Zschaepitz, a reporter for the German business daily Der Welt, documented the rise in the price of bitcoin since 2010 alongside the combined size of the Fed, Bank of Japan and ECB balance sheets.

It shows the consequences of imprudent monetary policy. Meanwhile, anemic liquidity returns in Europe and the United States since the global financial crisis have driven a generation of young crypto savers and arguably the biggest asset price bubble in history. Magellan Chairman Hamish Douglass has dismissed cryptocurrency as a worthless asset.

Hedge fund manager Paul Tudor Jones discusses the parameters of US monetary policy. Bloomberg

Respected US hedge fund manager Paul Tudor Jones laid out his plan to shield himself from central bank madness and the decline of the West long before the delta variants spread. Mr. Tudor Jones’ Great Monetary Inflation document written in May 2020 warns of the risks created by central bank policies in the era of the pandemic and explains why bitcoin as an apolitical and ultra vires asset class beats the returns of older asset classes such as gold, inflation-linked stocks and bonds.

Mr Tudor Jones said bitcoin is a store of value (albeit unstable) because it holds future purchasing power and acts as a hedge against inflation via a limited and slowed supply rate. It was also liquid and easily transferable in times of great political upheaval, he said, where voters elected governments hostile to holders of wealth accumulated through central bank policies, for example.

The investment legend said his 40 years of trading experience also taught him to own the fastest horse as the best profit maximization strategy. To choose it, he said you need to consider previous price action (i.e. which assets have responded best in today’s pandemic era) and not tie yourself to intellectual debates or historical rules.

Finally, he argued that bull markets rely on an ever-expanding universe of buyers. This is indisputable in the case of bitcoins and the main one is that digital wallets will become common tools in the West to facilitate the usefulness of property. Apple, PayPal, and Square have accelerated that, with the launch of Facebook’s Novi Wallet this year.

In response, China cracked down on crypto, Alibaba, and Tencent, with plans to launch a digital yuan soon. The West is behind, as crypto wins on its extreme monetary policy.

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