Bitcoin has risen above $44,000 (pictured) for the first time since earlier this month, with the crypto gaining about 20% since last week.
That’s amid an improving macro situation with stocks also green as Nasdaq rises another 1% today.
Euro stocks have been slightly more sluggish, with USA bulling in part because their president, Joe Biden, signed a $1.5 trillion spending bill last week.
Some call it a printing of $1.5 trillion, presumably because he’ll have to finance it through mostly borrowing, creating a stimulating effect.
In addition a lot of macro uncertainty has sort of vanished from a pricing perspective. There was that covid lockdown scare in November and December, if anyone remembers it as it feels like decades ago.
There was that whole interest hikes scare, which turned out to be a buy the news event.
And Ukraine enters precisely one month of war. Awful, but where markets are concerned, both Russia and Ukraine are tiny in the global economy and so this feels like it has moved to the area of politics, albeit war and peace politics, rather than the wider ‘ruling’ class being consumed by it – outside Russia and Ukraine.
That’s in great part because the leaders of Europe and USA have responded in a way one would generally expect. In such matters, it would take much for anyone to reasonably shout anyway, but they’ve been sufficiently competent to not quite demand much of a keeping an eye from areas that are not directly involved in that sort of thing.
Most crucially however, it is probably internal crypto factors that are driving bitcoin’s movement. The merge is coming, Do Kwon is buying, Tether is printing, spring is here, and $39,000 turned out to be iron support.
So this now billionaire goes off to see El Salvador. It’s a big story, a slow moving grinding of adoption. Node building, we call it, though human connections.
It’s as if certain forces have been unleashed since 2009 that move, without centralized leadership, in all directions towards the greatest upgrade in half a millennia: from paper to code.
All current financial instruments, including gold nowadays, are paper or paper represented. Paper is static, very limited by space, so requiring huge easily abused trust. Code is dynamic and has no space constraints, even theoretically across galaxies.
The upgrade therefore should have many inherent efficiencies, which will nonetheless bring more complexities because we can tackle bigger problems.
And yet, it may be that very gold that talks to bitcoin, if our provisional hypothesis does play out based on very few data points.
Gold reacted and very bigly to the events of February 24th and onwards. Bitcoin just looked.
Gold reacted and very bigly to the events of March 2020, reaching an all time high in August 2020. Bitcoin also just looked back then until it moved with huge streangth.
Does that mean gold reacts first, but bitcoin reacts proper? If it does, there would be plenty of explanations for it, including that traditional institutions have their if/then regarding gold, and perhaps a complete blindspot regarding bitcoin.
And, smarter money maybe goes from gold to bitcoin. That’s at least what a highly technical paper seems to claim in stating “return spillovers from gold were transmitted to Bitcoin.”
It also feels right, but we can’t predict the future, so it is more probabilities that a lot of factors are perhaps converging to get bitcoin bitcoining, at least for now.