Why you should short Bitcoin.
Let me begin by stating the obvious, we are in the midst of one the most speculative markets in recent history. Excess liquidity with topped out equity valuations and low interest rates have worked as the quiet undertone to what is a brewing disaster. To no surprise, folks have flocked to the most speculative asset of them all — Bitcoin. In the past couple of months, Bitcoin has rallied to over $50K under the narrative that it is risk-off macro hedge against global inflation. One that has been supported by the self proclaimed bitcoin evangelists and now even some major corporate buyers. Yet what folks are missing is that bitcoin has never fulfilled this narrative. Never. In fact, Bitcoin just like everything else was effected by the March sell off when governments around the world began placing heavy restrictions to combat the deadly COVID -19 strain. This is why there is no doubt in my mind that under the next major liquidity crunch, we will see Bitcoin fall drastically. People mistake “institutional capital” for validation. Instead, it should be seen as an opportunity for those die-hard bitcoin holders to get out at the obscenely high price it’s trading at now. I might very well be wrong…but then again; yields on treasury bonds are surging, bitcoin is down by 9% on the day, and this thing is just getting started.
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