Is Bitcoin in a Bullish Season ?

Is Bitcoin in a Bullish Season ?

According to Citibank’s forecast for the end of 2021, the price of Bitcoin will rise to $ 318 thousand (https://www.nasdaq.com/articles/citibank-analyst-says-bitcoin-could-pass-%24300k-by-december-2021-2020-11-16) . So is this possible?

I think we can answer this with a short analysis.

First of all, we have entered the last turning point of this year. This means that both gains and losses are possible. A smart investor takes a worst-case scenario. In other words, it is useful to take a position as if Bitcoin is going to enter a bearish season.

Investors know well that rising seasons are always followed by bearish seasons.

https://www.investing.com/analysis/bitcoins-price-action-rhymes-with-1970-gold-markets-says-citibank-200544659

The chart is taken from Citibank’s technical analysis for Bitcoin. When we look at the chart, we can see the rising and falling seasons of Bitcoin since 2010. According to the analysis made considering the trends in these seasons, the price that Bitcoin can reach towards the end of this year is above $ 318 thousand.

Bitcoin is called today’s gold. As you know, I have stated in my previous articles, gold and silver are real money. Bitcoin is also seen as a commodity just like gold and silver due to its limited production. This again requires a tight bond with interest, just like in gold and silver. That is, with real interest rates. If we look at it, real interest rates in America, for example, real interest rates on 10-year treasury bills are around minus 1.16 percent. What does this mean? This means increasing demand for commodities like gold, silver and bitcoin.

In the chart, we see the rise of checkable bank depoists after 2020.

What does this mean?

When the wages paid to people even though they are not working are added, it seems that the demand deposits in bank accounts increased from around 800 billion dollars before 2020 to 3 trillion dollars. When the interest rates turn negative in real value, deposits close to 3 trillion dollars await where they will go to invest. Why not bitcoin?

Read More

The Metaverse and Its Possible Economic Impacts

 

Metaverse is a brand new concept that has entered our lives. Meta means beyond, and verse is the abbreviation of universe. In short, the metaverse. In short, a new virtual world is being tried to be created. In fact, this is the newest connection project discovered after internet technology. While a computer is required to connect to the internet, virtual glasses are sufficient to connect to the metaverse. In addition, equipment such as headphones and augmented reality glasses can also be used.

A whole new world, both physical and digital.

Metaverse is a brand new application with many components such as blockchain, augmented reality glasses, hologram. What is trying to be done with Metaverse? Let’s say you are not happy, unsuccessful, or have an unexcited life in your normal life. It invites you to the metaverse and there you enter a brand new world, perhaps just the way you want it to, that is, it is impossible to do or reach in real life.

You can also earn money while doing this. You can create your own avatar in the metaverse world and start a company there. You can move your current company to the metaverse in three dimensions. In that case, will you be able to transfer the money you earn there to your real-world account? This may be the first question that comes to mind.

Actually, the name metaverse comes from a novel called “Snow Crash” written in 1992. The author of the novel is Neal Stephenson. This novel is among the 100 best novels written between 1923-2005. The plot of the novel is that governments lose control after the great economic collapse. Governments are being liquidated. Control of America falls into the hands of entrepreneurs and organizers. Los Angeles is seperated from America.

In fact, investments in this technology started towards the end of the 1990s. For example, Facebook (renamed “Meta”) made its augmented reality investment in 1997. In order to take your place in Metaverse, you must first have a digital identity. Therefore, Metaverse is a combination of virtual world, internet and augmented reality.

One of my previous articles was “De-Fi”. So, decentralized finance. Here, Metaverse could be an environment where decentralized finance can be implemented. After that, the place where companies can make their real advertisements will be the metaverse area. Let’s say you created your identity and shape in this created virtual world and carried your company to your own avatar. Instead of coming to your company from New York to Los Angeles and interviewing, you will be able to meet with your customers or partners in the metaverse.

In such a case, if your identity in the metaverse becomes more successful and effective, will the real world begin to lose its appeal after that?

How acceptable would that be? Value generally occurs when many people accept that value or asset. For example, bitcoin would not exist today if it were not accepted by many as a means of carrying value. If the Metaverse is accepted by many, it can consolidate its position and the above-mentioned possibilities can be realized. It seems to me that this is not such a remote possibility.

In short, it is possible to do everything you can do in the real world (which is questionable) and more in the metaverse world. This new virtual world is likely to be adopted by everyone. One of the reasons for this is that in the real world, people who are overwhelmed by issues such as health problems, climate crisis will prefer the metaverse as an escape.

In my previous articles, I talked about digital states, the digital world. As mentioned in the novel, with an interesting similarity, an economic chaos emerges in the world and governments lose their effectiveness. There is an orientation towards digital citizenship human beings. For example, the parties that won the election in Germany, even before they came to power, changed the unemployment benefit to the name of “universal basic income”.

Big companies are investing in the metaverse. For this it needs to be at least 6g. Quantum processors are needed. These technologies need to accelerate.

Read More

Gold Ounce Price vs. DXY Index

 

There has always been an inverse relationship between gold price and the dollar. One of the measurement scales of the demand for the dollar is the DXY index, which is the average index of the dollar equivalent of 5 countries’ currencies. If the DXY index is increasing, it means that the demand for dollars in the world is increasing. As can be seen in the graph, the reverse relationship between the dollar DXY index and the gold ounce price in the last year is quite clear. With the DXY rising, the gold price is falling and vice versa. The DXY index has started to decline accordingly, as the reserve currency of the dollar has weakened more and more, and gold has started to attack. This was an expected development.

Read More

Central Bank Digital Currency

 

The monetary system is changing as a natural target of technological development. The time to say goodbye to fiat papers and coins is near. In this new financial system, when the economy starts to shift to digital environments, money cannot be expected to remain in its old form. In addition, we know that in the old system, the intermediary financial structures that created the money, namely the commercial banks. With the digitalization of money in the new system, it seems that commercial banks are coming to an end, thanks to the digital money issued by central banks.

It seems that most of the seigniorage revenues of these structures will be included in the state budget, thanks to the state’s control of the money in digital form to a large extent. Thus, we will open our accounts directly in the central bank. According to some, it seems that the state’s control in the financial world will expand thanks to the change in the form, printing and control of money. In this way, it is inevitable that all commercial and economic activities are reshaped and the control of capital and the way it is created will change.

Read More

FED Balance Sheet in the Monetary Crisis Process

 

We see the balance sheet of the US central bank Fed in the chart. After the 2008 crisis, the Fed printed approximately 4 times the amount of money it printed in 200 years. The balance sheet, which was around 800 billion dollars until 2008, increased to 3 trillion dollars after the 2008 crisis. As of March 2020, when the first wave of the great financial crisis we were in came, it increased its balance sheet, which was around 4 trillion dollars until then, to 7 trillion dollars. At the beginning of the crisis, Covid gave money directly to the unemployed households in the economy that was closed due to the 19 epidemic, using a method called “helicopter drop”. Here we understand once again that every money printed since 1971, when money was cut off from gold, is a debt, a debt of interest. This debt was borne by the state in Japan and to the public in Switzerland.

Read More

Global Debt

 

Information showing the ratio of total government debt to global production (GDP) globally is given in the graph. When we look at the chart, we see that the total global government debt was 2.28 times the total production in 1999, 3 times in 2009 and 3.19 times in 2019. This globally increasing debt gives an idea about how fragile countries are in the financial crisis we are in.

I suggest you also read my “global debt” article on this subject. Global Government Debts-to-GDP Ratio

Read More

Indebtedness of Countries

 

State indebtedness rates are given in the table. According to the table, the top five most indebted states are Japan, Greece, Lebanon, Italy and Singapore. Japan, the most indebted country, owes its annual output approximately 2.37 times its GDP. Then Greece follows with 1.77 times, Lebanon 1.51 times, Italy 1.35 times and Singapore 1.26 times. The USA ranks eleventh with 1.07 times. This ratio is 0.33 in Turkey (www.tradingeconomics.com/country-list/). We may wonder how developed countries such as Japan and the USA survive with these indebtedness rates.

One of the important pillars of the smooth running of things in the economy is the continuing trust in the country’s currency and the acceptance of the country’s currency in the international arena. Another reason why the indebtedness is so big is not a problem is undoubtedly the strong industrial production of these countries. In Japan, interest rates are “0”, if it is 1, there will be difficulty in paying the government debt and the risk of the economy collapsing.

Read More