Bitmex’s CEO Arthur Hayes has predicted bitcoin’s price will reach $10,000 this year in a newsletter to his customers. He says:
“2019 will be boring, but green shoots will appear towards year end. The mighty central bank printing presses paused for a while, but economic sophists could not resist the siren call of free money.
They are busy inventing the academic crutches (here’s looking at your MMT), to justify the next global money printing orgy.”
He ties bitcoin prices to Fed’s actions on interest rates as well as PBoC’s unwillingness to reign in credit growth, stating:
“The Fed couldn’t stomach a 20% correction in the SPX. In the recent Fed minutes, the dot plot now shows now [sic] rate increases for the rest of 2019. The Fed will start reinvesting its runoff in the third quarter. We are only a hop, skip, and a jump away from an expanding Fed balance sheet.
Beijing knows China must rebalance its economy away from credit-fueled fixed asset investment. However, Xi must not have the political cojones to push this sort of painful change through. Therefore, the PBOC said ‘fuck it’ to any attempt to reign in credit growth. The two most important central banks are creepin’ back into a super easy credit regime.”
His entire analysis appears to be based on this idea that central bankers will keep mismanaging their money, ending with Hayes stating:
“Green shoots will begin to appear in early Q4. Free money and collective amnesia are powerful drugs. Also after two years of wage cucking, punters should have a few sheckles to rub together.
The 2019 chop will be intense, but the markets will claw back to $10,000. That is a very significant psychological barrier. It’s a nice round sexy number. $20,000 is the ultimate recovery. However, it took 11 months from $1,000 to $10,000, but less than one month from $10,000 to $20,000 back to $10,000.
Melissa Lee peep this. $10,000 is my number, and I’m stickin’ to it.”
Melissa Lee being a news anchor for CNBC with this letter filled with quite a few memes, but it looks very authentic.
Is he right though? Well, we’ll know by the end of the year, but there appears to be a general change in sentiment.
Some correlation between interest rates and asset prices has been noticed, but bitcoin is global so it might have been a coincidence.
Now this is an old graph redrawn for our times. According to this, bitcoin will reach a million within a decade. By then, however, a million will be worth what $100,000 is worth today because inflation.
About 20-30 years ago when our parents were the millennials a house was worth $20,000. Like changing seasons, inflation too is slow, gradual, and unnoticeable, until one day you look back and think wow, a zero has now been added.
In some places like Venezuela they’re added every second, but the monetary system is the same literally everywhere.
Every central bank in the entire world does pretty much the same thing. So manny nations, dictatorships, kingdoms, democracies, semi-communistic countries – yet all have the very same debt based monetary system.
So if bitcoin does reach a million in a decade, it might not necessarily be that it rose in value, but that the dollar fell.
Unlike all fiat money, bitcoin can’t just be printed. Its value is fixed by code, with new supply halving through those red lines above until it effectively reaches zero.
That’s very long term. $10,000 by year’s end would be a circa 3x rise. Fully possible, considering the halving would be due shortly by then, with the withdrawal of that new supply, combined with continued fiat inflation, creating a double effect. So we’ll see.