“Technology does not drive change. It is our collective response to the options and opportunities presented by technology that drives change.” – Paul Saffo ||
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IN THIS NEWSLETTER:
Why bitcoin reacted strangely
Inflation and irrational expectations
Bank lending
Logistics and politics
WHAT I’M WATCHING:
Why bitcoin reacted strangely
By now you’ll no doubt have seen the US October inflation figures – good news on all fronts, with a stronger-than-expected slowdown in both headline and core CPI increases. Even the so-called supercore measure, which also removes housing, rose at about a third of the pace in September month-on-month. Sticky services inflation seems to finally be cooling.
But, the reaction in the bitcoin market was kind of weird.
Risk assets celebrated, with the Nasdaq jumping 2.4% yesterday. BTC rose almost 1.5% on the news, but then dropped sharply, down to $36,000. It bounced, but then continued dropping. Bitcoin was not behaving like a risk asset that would benefit from higher liquidity.
(chart via TradingView)
Even gold jumped when the inflation data came out, and continued rising. Bitcoin was also not behaving like a hard asset that benefits from a weaker dollar.
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