Ever since the 2017 crypto bubble that took Bitcoin from under $ 1,000 to $ 20,000 in one year, analysts have wondered what will trigger the next rally.
Many have relied on the Bitcoin block reward halving earlier this week, but growing belief that central bank and government liquidity is the “main catalyst” to triggering a bull market in both Bitcoin and gold.
Fund manager: “Long Bitcoin and Gold” because of money printing
Macro hedge fund manager Dan Tapiero, just a year or so after seriously stepping into the bitcoin space, is telling investors to “long gold and bitcoin” based on a single chart below.
The graph shows the US money supply M2, or the value of cash-like balances and securities over the past 13 years. Notably, the metric’s year-over-year growth jumped to 21.6% recently on May 4th, the highest on the chart and supposedly the highest ever. Tapiero stated:
“One of the most incredible and important charts I’ve seen in 30 years. […] The speed and magnitude of the movement in liquidity creation will never be seen again. March was maximum fear / worst case. Long gold and Bitcoin. “
One of the most incredible and important charts I’ve seen in 30 years.
Expose existing macro-analytical frameworks to understand world markets.
The speed and magnitude of the movement in liquidity creation will never be seen again.
March was maximum fear / worst case. Long gold and bitcoin. pic.twitter.com/ZxuQEwd278
– Dan Tapiero (@DTAPCAP) May 15, 2020
Bitcoin programmer and educator Jimmy Song noted that the exact growth in the supply of US money supply M2 has been 15% over the past three months, increasing from $ 15.4 trillion to $ 17.7 trillion, which is one Corresponds to an annual rate of 75%.
Tapiero’s comment came hours after a similar statement by Bloomberg Intelligence’s chief commodities analyst Mike McGlone. He said that while the central bank’s liquidity will help stocks, it will help the “quasi-currencies” bitcoin and gold in particular:
“Central bank liquidity can constrain the stock bear, but it is a major catalyst for reviving bull markets in quasi-currencies.”
It’s a popular story
It’s not just Tapiero and McGlone who picked up the narrative of printing money and applied it to find or identify value when adding bitcoin to your portfolio.
In the past two weeks, legendary macro investor Paul Tudor Jones, valued at over $ 5 billion, took a serious look at Bitcoin for the first time.
The reason: He fears that what is happening in the global economy is “Great Currency Inflation” while there is “an unprecedented expansion of every form of money such as the developed world has never seen”.
For him, Bitcoin is a hedge against such inflation as it has the characteristics of a store of value, the most notable of which is the fixed supply cap of 21 million.
Elon Musk – the multi-billionaire boss of Tesla and SpaceX – also joined the money printing train.
As reported by NewsBTC, the technologist said on Twitter on Friday that he believes the massive currency issuance “by governments and central banks makes Bitcoin” look solid compared to fiat money. “
Musk made this comment in response to “Harry Potter” author JK Rowling, who first tried to understand the what and why of Bitcoin. He didn’t convince Rowling, but did manage to spark a positive response from the cryptocurrency community, branding him as the main proponent of Bitcoin for the umpteenth time.
Quite a lot, despite the massive issuing of central bank currencies making Bitcoin the internet? Money looks solid by comparison
– Elon Musk (@elonmusk) May 15, 2020
However, it remains to be seen how exactly those trillions of fiat dollars worth of pressure, fiscal and monetary stimulus will be transferred to the Bitcoin marketplace.
Featured image from Unsplash
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