Bitcoin’s New All-Time High, AI and Autonomy, Ross Stores Disappoints
Bitcoin’s New All-Time High
Bitcoin has a market cap of $2.2 trillion. (I arrived at that number by multiplying the price by the total number of bitcoin in circulation).
That value puts it in the same realm as some of the world’s largest companies. For example, Alphabet’s market cap is $2.1 trillion.
To sustain that value there has to a steady flow of investors willing to buy at new all-time highs.
There are two ways to generate sufficient interest to sustain that momentum.
The first is to print more money. That has been the classic solution to support bitcoin prices.
There has been a discernible rhythm to the market since 2008. Every four years a new source of supply arrives to support bitcoin.
The first round of quantitative easing, then subsequent rounds, then large fiscal stimulus all supported the price in the 500 days following each halving of the reward for mining.
The dual monetary and fiscal splurges in response to the pandemic fuelled the run up from $10000 to $60000. That is the most recent example of a liquidity fuelled rush.
The second big factor that supports bitcoin is regulatory support.
The creation of bitcoin futures, ETFs, stablecoins and options all serve one purpose. They widen the route for new cash to access the market.
That is a necessary condition for any big bull market to grow.
It must become easier to access the market and to deploy leverage in the pursuit of outsized gains. That is what creates speculative fervour large enough to support heady valuations.
You will notice that I do not give any credence to the potential use cases for crypto. I am willing to accept that moving to 24 hour trading and instant settlement are advantageous.
However, I don’t believe sustain a multi-trillion infrastructure is the most cost effective way of achieving those goals.
So what is driving the price higher now?
