Bitcoin surges again and there seems to be no stop. What are we looking at exactly? First of all a massive increase in market capitalization of the crypto market. Well over 10% in 24 hours, bringing the estimated market cap well above 650 Billion, with Bitcoin taking well over 63% of this market cap.
People start running away from the USD. The Euro for example costs 1.22 USD today, while some months ago people expected parity between Euro and USD. If - for example - your base currency is Euro but you trade in USDT you need a surge of Bitcoin of about 20% just to break even...
What should we do? Be happy about a rising Bitcoin or be sad about a declining dollar? What narrative should we chose to explain this all? Failing elections? The price for endless money printing? I am not sure.
What I am sure of is that we must look at both sides of the pairs we trade. Bitcoin at 100K is not very useful for anybody when the price of a loaf of bread surges to 10K.
I also have a hard time believing this surge has substance. The capital that Bitcoin and crypto attracts right now is largely flight capital in the hands of people that can as easily smash down marketcap overnight the same 10% as they can make it rise. In other words: we do not know if they are here (in crypto space) to stay. Do not be surprised if Billions run out overnight and find other markets.
My conclusion: keep trading... No value is intrinsic in any absolute sense. I do not even trade Bitcoin myself - I am finding my way in Alts. More available instruments and nicer volatility patterns. Every value only has value put against another value. Loving crypto as I do, I am not hooked on it. I keep my eyes on change. Of course I am only human and cannot help feeling good about what seems to be playing out with crypto. But trusting it is another thing. A position is good as long as it works. Not a minute longer.
<br /><center><hr/><em>Posted from my blog with <a href='https://wordpress.org/plugins/steempress/'>SteemPress</a> : https://cryptmove.com/2020/12/17/you-tell-me/ </em><hr/></center>