I have been in bitcoin since 2014; I know this palette of feelings quite well. Exaltation followed by disappointment and even unease. The old-timers in crypto know what “strong hand” means. So why bother? Well, you don't necessarily get used to it and newbies have had a hard time. I feel for them. But hey, those who survived the 2021 year-end, and kept they bitcoins safe from greedy whales can now in turn help newcomers.
BTC hit new all-time highs on Wednesday 10 November. At the same time, the US government released the official inflation rate for the previous month. Sorrowful spirits saw a happy correlation in this. Yep, consumer prices rose 6.2% in October - the biggest inflationary jump over 30 years. Is the printing press (so to speak because 90% of dollars are digital) responsible for the unprecedented highs reached (nearly $ 69,000 per bitcoin)? Traders were still celebrating the event when bitcoin deflated. Several thousand dollars lost within hours. What happened ? Well, we live in a macro world where all local economies, pensions, house prices, etc. are interconnected and interdependent. On the other side of the world, Evergrande, the gigantic Chinese real estate developer, suffocating in a whirlwind of debt (the hole is 300 billion dollars) raised the fear of bankruptcy on the 19 billion dollars of bonds owned by foreign companies. That did not happen, but in finance the sentiment prevails and when a formal bankruptcy proceeding of this size is no longer a secret the markets retract.
Bitcoin is no longer an exception; its market (it went over a trillion dollars at the beginning of November) is now subject to macro volatility. Many believe that bitcoin is an uncorrelated asset (evolving independently of the way the world works), I think, they will do well to take notes and re-evaluate. The king of all cryptos has become a macro-asset that has not been spared by economic geopolitical events.
The year 2022 is in the same vein. Bitcoin is still in a consolidation phase, the most pessimistic speak of a bear market. The others, as I have just mentioned, of a long consolidation phase which will see in the coming weeks a capitulation then a return to green indicators and why not beyond June, a bitcoin at 100 dollars.
Either way, the war in Ukraine, the shortages, and the incredible inflation rates just revealed by Western governments in mid-March 2022 (around 10%) are much bigger tests for bitcoin which, let's not forget, is a young technology whose behaviour is still a mystery in the face of large macroeconomic movements. With bitcoin we are making history as we go. Only one thing is certain: the accumulation of bitcoins by retail holders but also by large companies is constantly increasing, legislation integrating crypto currencies into the traditional economy is advancing rapidly, and small countries are preparing to accept BTC as legal tender. If 2021 was incredible, 2022 will be epic!