$Bitcoin (BTC.CC)$ I predicted a month ago crypto would begi...
I predicted a month ago crypto would begin a bull run following the fed cutting rates and it seems like that is playing out. As the fed prints more money the value of the dollar falls and inversely causes crypto currencies to rise in value, and as the cost of living decreases more people will begin to feel comfortable investing in the markets so long as we don't have a recession on the horizon. People will also move more of their savings into the market as interest rates fall. With many more cuts likely to follow, this bull run could go on into 2026 and we could see crypto prices rise at a smiliar rate to 2021 and break all time highs very easily in the process. I could be wrong though so do your own research.
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10baggerbamm : well your statements not exactly correct from an economic standpoint.. it's not as if they were not printing money in the past and now they're printing money. and lower interest rates actually reduces The debt service. so in theory using your example lower interest rates they'd be printing less because the cost of borrowing would be lower.
Parp OP 10baggerbamm : in the past they were printing loads of money which has a strong correlation with the bull run in late 2020 - 2021 and then when they started hiking rates you will see that crypto entered a long bear market for most of the duration. Also one of the tools the fed uses to cut rates involves them having to print money. The way they do it is they buy up a bunch of treasury bonds which increases the money supply drastically and once the money supply increases the value of the dollar falls of course and yes the cost of borrow is lowered however people are also more likely to borrow more money as a result.
Parp OP 10baggerbamm : I believe it is what they call "quantitative easing"
10baggerbamm Parp OP : well it started with qe1 and then QE2 and then it became QE Infinity. the Federal reserve has a policy if he can believe it it sounds crazy but their policy is to devalue the Dollar by 2% a year and that's called inflation. and if you listen to chairman Powell they've actually been reducing their balance sheet meaning they're not buying as much of their own debt kind of sounds funny right what do you call that oh yeah a Ponzi scheme.
Parp OP 10baggerbamm : I don't think it will be as crazy as 2020 but ever since 2020 most of our economies have almost synced up since we all had emergency cuts at the same time and as a result most other countries have been making changes to their interest rates at the same time which seemingly has affected crypto even more and as of right now a large portion of central banks are also cutting rates which I believe will have a meaningful affect on the value of crypto. So basically while it won't be the same setup as 2020 it's still similar enough to trigger a large bull run unless I am missing something or we see the worst case scanerio and suffer an economic crisis.
Parp OP 10baggerbamm : another interesting thing to factor into this is that quatitaive easing has a compunding affect, the more we cut the more money will have to be printed in the future to achive the same sized cut which is crazy when you think about the money that has been printed during the covid crisis
10baggerbamm Parp OP : 7 trillion. people throw numbers around like it means nothing do you realize if the day you were born you started counting and every second you could count two numbers by the time you're at 100 years of age you could not have counted to a trillion you wouldn't even be remotely close.
Parp OP 10baggerbamm : I’m not sure what you’re trying to get at. However you’ll know these numbers are very important if you understand how compounding and supply and demand work. With the rate at which we are printing money into the market it will someday reach such high numbers that demand will inevitably fail to keep up due to the rapid compounding affect and if supply is rapidly outpacing demand it means the value of that thing naturally decreases exponentially. Crypto and precious metals like gold act as a hedge against this as it will always have a limited supply.
10baggerbamm Parp OP : your model that you gave will never happen all you have to do is look at the Weimar Republic.. their inflation was so high the cost of goods was so great that people would get out of work every hour with wheelbarrows worth of money to go buy a loaf of bread because if they waited till the end of the day they wouldn't be able to afford it
Parp OP 10baggerbamm : What you are saying supports my point about crypto though, I just said it acts as a hedge against that very thing.
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