Bitcoin occupies a unique position in our macro analysis.
On the surface, it doesn’t make much sense as an asset. Bitcoin’s 9-page whitepaper, released at the height of the financial meltdown in late 2008, describes it as a “peer-to-peer electronic cash system.”
But here’s where things get interesting. Bitcoin was designed to avoid what’s known as the “double-spend” problem in digital transactions. That, and its 21 million supply cap, ended up creating a digital asset harder than gold.
At a high enough price, gold can be pulled out of the ocean floor, or mined from asteroids. But once bitcoin hits its 21 million cap in the year 2140 – that’s it. And today, it’s already 96% mined.
The bitcoin price operates in four-year cycles. Last October, bitcoin entered a vicious bear market. Today, nearly a year later, it’s starting to show its first sign of breaking out:
Recent price action, starting with the resumption of the debasement trade, has sent bitcoin soaring.
Last week, after the Clarity Act failed in the Senate… again… bitcoin sold off briefly. Then reversed and surged higher.
Now, the digital asset is back over its 200-day moving average.
In prior bear markets, similar rallies have marked the end of the bear. Throw in the resurgence of the debasement trade since late July, and bitcoin is due to start notching higher once again.
In today’s PRO, Andrew reviews a few ways to take advantage of BTC’s breakout before it starts attracting headlines like last fall.
~ Addison
P.S. This afternoon on the Grey Swan Trading Fraternity, we’ll review the recent rally in the stock market, why it doesn’t pass the smell test, and why you want to stay cautious.
