How This Bitcoin Rally Is Different From 2017-2018


One month ago. That coin was it about eleven thousand five hundred dollars and today it's flirting with eighteen thousand dollars and even when as high as eighteen thousand four hundred dollars and wednesday based on that. Hi there were only four days in bitcoin history when the price was higher and yet back then that increase was fueled by the initial coin offering craze in this breathless media coverage an issue runners. A lot less fanfare barely talking about it. So what would you say makes this increase in the price. Different from what we saw in late. Two thousand seventeen in early twenty yeah. There's a few things that are completely different this time. Around endogenously. the markets the structure of the market is totally different and the market infrastructure has evolved and changed dramatically. That's obviously our focus is a fondest financial market Structure and i can tell you that it is completely different this time around. It's much more mature. It's more sophisticated There's just more financial products available and there's more tools that qualified accredited large investors can use to get exposure. So that's you know it's one side which is just practically in infrastructurally speaking it's easier to get exposure to the market today And you know that looks a lot more mature and just generally speaking financial plumbing. His is more functional time around and then of course extra you have real macroeconomic tailwinds which are driving serious alligators towards allocators. Sorry towards the asset like real names and commodity investing the hedge fund world a global macro names who obviously we've heard them expressing a positive view of the price that latter element probably gets a little bit more attention. I'd say the former. Those dodges factors also very critical. I can't say that our current appreciation or rally is directly attributable to that. But it certainly means that we have the capacity onboard much more capital in a shorter period of time. And the other thing that i would mention as you say is that bitcoin was kind of being used as a flow through asset for retail investors primarily to get exposure to isos onto tokens and to trade sort of long 'til on some of these offshore exchanges and bitcoin was their entrance into the market. So a lot of the allocation of bitcoin was really transient. And that's partly why. I think we saw so much reflexively in the price and it's rally was not very enduring back in two thousand seventeen now. Of course the backdrop is different. There's last mania. This fewer new tokens launching. I think the regulators generally discouraging people from launching new isos in the manner that they didn't twenty seventeen and so bitcoin isn't being used in that capacity anymore. So you know it's easy to look at the price chart and see passes prologue. You know what's different today. I think if you look a bit deeper you look at the nature of the market. It really is dramatically different. So you did briefly. Mention the pandemic. And i'm sure this is kind of hard to quantify but i just wondered you know how big do you think. The impact of the pandemic has been on the rise of the bitcoin price this year. Well i wouldn't say directly affected but indirectly for sure. I mean first of all. Bitcoin is kind of a d. Materialized natively digital asset like a lot of those companies that are very sort of capital light. That did very well. During the pandemic era said bitcoin also benefited from that in terms of physical infrastructure. But it's completely distributed doesn't really rely. It's not interfered with by the pandemic directly and then on a more direct basis. I would say the action of central banks to the crisis is probably the big phenomenon. That's fueling bitcoin here. We're seeing people like to say on. Precedent really unprecedented monetary action. Someone say the sort of degeneration of the current sort of monetary orthodoxy. M one that measure of money supply and the us is growing at forty percent. Annualized right now. So we're seeing the monetary aggregates skyrocket in more so than not because you know quantitative easing money issuance. It doesn't necessarily have an impact on cpr prices and the real economy but we are seeing calls for more direct stimulus directly into the economy. Which would presumably be more inflationary in nature. Which would make it into the real economy which was not the case with previous bounce of qb so if that is the case if we have another six or twelve months of lockdown. I think we could really start to see a political demand for direct issuance. Issued in a kind of a fiscal capacity. And many believed that that could be natively more inflationary and of course as a hard asset and an asset with no monetary discretion. Bitcoin is something that people look to as an alternative in that circumstance so really remains to be determined whether get inflation or not but certainly the specter of inflation is looming. And i think that's part of the reason people are taking

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