Read on Twitter
Thread 1.) Get your popcorn ready; it’s Bitcoin VS the Fed in Q4.
The upcoming election has widespread ramifications across the global economy (BTC not excluded) https://twitter.com/SquawkCNBC/status/1319264687733821441
The upcoming election has widespread ramifications across the global economy (BTC not excluded) https://twitter.com/SquawkCNBC/status/1319264687733821441
PTJ touched on this recently, leading me to dig deeper into some stats and to reach out to legendary trading psychologist @brettsteenbarger for more. Dr. Steenbarger has worked with several large macro hedge funds, including PTJ’s. During our conversation, we discussed:
2.) Politics
The majority of polls have Biden holding a 70%+ chance of winning the presidential election and even higher potential for a blue wave sweep through the senate.
The effects of these could mean...
The majority of polls have Biden holding a 70%+ chance of winning the presidential election and even higher potential for a blue wave sweep through the senate.
The effects of these could mean...
larger stimulus packages, more QE, and give institutional investors clear guidance going into a new administration. These factors could potentially lead to:
A weaker Dollar
Q4 stock market rally
Gold could rise as a hedge against inflation
Bitcoin outperforms SPY and Gold - IMO
A weaker Dollar
Q4 stock market rally
Gold could rise as a hedge against inflation
Bitcoin outperforms SPY and Gold - IMO
3.) The DXY post-stimulus
Cares Act was a $2.2 trillion economic stimulus bill signed by Trump on March 27, 2020.
DXY: - 8% over the next 5 months
Recovery Act was an $831 billion stimulus package signed by Obama on February 17, 2009.
DXY: -15% over the next 10 months
Cares Act was a $2.2 trillion economic stimulus bill signed by Trump on March 27, 2020.
DXY: - 8% over the next 5 months
Recovery Act was an $831 billion stimulus package signed by Obama on February 17, 2009.
DXY: -15% over the next 10 months
4.) QE
Since September 1, 2008, the Federal Reserve has increased its balance sheet from $800 Billion to $7.17 Trillion through the use of QE. With the potential of a Covid-19 second wave and subsequent economic shutdown, there is a possibility the Fed continues this process.
Since September 1, 2008, the Federal Reserve has increased its balance sheet from $800 Billion to $7.17 Trillion through the use of QE. With the potential of a Covid-19 second wave and subsequent economic shutdown, there is a possibility the Fed continues this process.
5.) Stimulus could boost the overall market
Cares Act effect from March 27, 2020 - S&P 500: +43% over the next five months
Recovery Act effect from February 17, 2009 - S&P 500: +170% over the next six years
Cares Act effect from March 27, 2020 - S&P 500: +43% over the next five months
Recovery Act effect from February 17, 2009 - S&P 500: +170% over the next six years
6.) Administration changes can lead to a rally
Trump wins the election on Nov 8, 2016 - S&P 500: +35% over the first year
Obama wins the election on Nov 3, 2008 - S&P 500: +8% over the first year
Trump wins the election on Nov 8, 2016 - S&P 500: +35% over the first year
Obama wins the election on Nov 3, 2008 - S&P 500: +8% over the first year
7.) BTC’s recent correlation with SPY
8.) Gold as a hedge against inflation from stimulus
Cares Act effect from March 27, 2020 - Gold +40% over the next four months
Recovery Act effect from February 17, 2009 - Gold +102% over the next two and a half years
Cares Act effect from March 27, 2020 - Gold +40% over the next four months
Recovery Act effect from February 17, 2009 - Gold +102% over the next two and a half years
9.) Bitcoin’s recent correlation with Gold
10.) Bitcoin: Post-2016 Election
Although the 2016 BTC run was primarily due to the Halving, BTC rose by 65% over the next two months post-election.
Although the 2016 BTC run was primarily due to the Halving, BTC rose by 65% over the next two months post-election.
11.) Bitcoin’s inflation rate
900 Bitcoins are mined per day, with an annual inflation rate of 1.8% over the next 4 years. The Federal Reserve has set its annual inflation target at 2%.
900 Bitcoins are mined per day, with an annual inflation rate of 1.8% over the next 4 years. The Federal Reserve has set its annual inflation target at 2%.
12.)Bitcoin = Gold?
No, Bitcoin is Bitcoin, but from JP Morgan’s report, IBs will pitch it to their clients as ”Digital Gold.” It has similar characteristics to Gold with its limited supply and classification of speculative investment, but Bitcoin has 1/10th the MC of Gold.
No, Bitcoin is Bitcoin, but from JP Morgan’s report, IBs will pitch it to their clients as ”Digital Gold.” It has similar characteristics to Gold with its limited supply and classification of speculative investment, but Bitcoin has 1/10th the MC of Gold.
13.) Fundamental shifts in this run
-Big players like PTJ help give legitimacy to BTC
-Corporations adding BTC to their balance sheets
-Paypal launches crypto support for 325 M users
-Banks change of tone towards BTC
-Exchanges having better infrastructure
-Big players like PTJ help give legitimacy to BTC
-Corporations adding BTC to their balance sheets
-Paypal launches crypto support for 325 M users
-Banks change of tone towards BTC
-Exchanges having better infrastructure
14.)Summary
-My analysis could be wrong with a Trump upset, a sell-off from fear of Biden's tax plan, or no blue wave through the senate.
-Short term volatility is a given.
-Out of SPY, Gold, and Bitcoin, I believe Bitcoin will perform best in Q4.
-My analysis could be wrong with a Trump upset, a sell-off from fear of Biden's tax plan, or no blue wave through the senate.
-Short term volatility is a given.
-Out of SPY, Gold, and Bitcoin, I believe Bitcoin will perform best in Q4.
