Re:Cryptocurrencies add nothing useful to society, says chip...
by nightski on Sunday March 26, 2023 @03:51PM
(#35318799)
Yeah but institutional investors were just starting to hold much larger positions within the last few years. They are much more sensitive to interest rate hikes than individuals.
Re:Cryptocurrencies add nothing useful to society, says chip...
by anonymouskimmer on Sunday March 26, 2023 @04:19PM
(#35319107)
I would assume that as long as the returns are greater than the interest rates, institutional investors are less sensitive than individuals to interest rate hikes.
Re:Cryptocurrencies add nothing useful to society, says chip...
by tric on Sunday March 26, 2023 @06:33PM
(#35320398)
> The 2017 peak happened in the middle of a US interest rate increase cycle. The 2021 peak happened 6 months before the most recent US interest rate increase cycle
Denominate the Bitcoin market cap in US M1 money supply. You will then see that it peaked in 2017, 2019, and 2021 (twice). This ratio also bottomed recently.
Effectively, when the central bank that manages the word's reserve currency starts printing money (or there is an anticipation of printing), Bitcoin appreciates. The opposite happens during tightening (ie rate hikes).
Re:Cryptocurrencies add nothing useful to society, says chip...
by eric_cc on Monday March 27, 2023 @09:31AM
(#35326472)
In recent years, you can argue that bitcoin has acted as a canary in the coal mine. Bitcoins chart is pretty much the same as stocks (especially tech/growth stocks). It just moves slightly ahead of stocks sometimes.
It's constantly been peaking and collapsing since 2013, when there were no US interest rate increases. The 2017 peak happened in the middle of a US interest rate increase cycle. The 2021 peak happened 6 months before the most recent US interest rate increase cycle. I'm sure interest rates were varying in other countries on different schedules, but blaming a crypto market collapse on interest rate hikes doesn't seem to square with the data.