Bitcoin has been the second best performing asset of 2024 behind NVDA. Following the approval and launch of the BTC ETF in January, flows have been strong into the crypto currency, with a second wave of inflows after the presidential elections, as the new administration is seen as supportive. Perhaps both moves can be perceived mostly as speculative, due to their explosive nature and not necessarily strategic and long term in nature. As a matter of fact, last Thursday Bitcoin ETFs experienced the biggest outflow since its creation ($680M) and as the year closes, some investors may be looking to close their gains and secure profits, particularly if the Fed is seen less dovish than anticipated. Aside from speculators, there is some correlation with Global Money Supply (M2), as it should be, and as you can see in the chart below, the global monetary base is shrinking, which could also bring the Bitcoin mania to a pause. Does that imply more US dollar dominance ahead or it’s simply a hiccup? What are the long term implications for the global economy of a strong Bitcoin?
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