Looking at the monthly K line chart of Bitcoin in the past 10 years, I accidentally looked at the K line monthly chart of the Dow Jones Index in the past 10 years, and found that the overall trend is very similar: on a four-year cycle, Bitcoin and the United States have gone A bull market for almost 10 years!
I cut a monthly K chart of the Dow Jones Index for nearly 10 years, and marked the time points of the highest price (green line) and the lowest price (blue line) of Bitcoin in each bull and bear cycle. The month of the general election is marked with a yellow line:
The conclusion is:
1. The presidential election year is also a half-year reduction of Bitcoin;
2. During a single presidential term (4 years), after the president took office, the Dow Jones index monthly K line began to rise rapidly to a cyclical high, and the time between this high and the bitcoin price cycle high does not exceed 1 month;
3. After the Dow Jones index bull market, the lowest point of the monthly K line and the lowest point of the bitcoin price after the bull market appear at almost the same time.
This should not be a simple coincidence, so I also made a bold speculation of patting my head:
1. The re-election or new appointment of the President will vigorously develop the economy (including printing money and releasing water), which will bring about a rapid rise and a new high for the Dow Jones Index. In the mid-term elections or the year before the change, due to uncertainties in re-election and policy sustainability, the Dow Jones Index also began to consolidate a bear market;
2. The price and cycle of Bitcoin are highly related to the Dow Jones Index and the “dollar economy”. After all, the US dollar is the main medium for Bitcoin transactions, and the United States has a compliant market;
3. Bitcoin’s halving market is actually a rapid rise after halving. To be more precise, it should start after the US presidential election. The next election is November this year, you know.
Further analysis, if the US stock market did not rise sharply after this year’s election and the bull market, then tens of times the increase in BTC will appear? I think from the perspective of the stock market, halving can indeed break the existing supply balance. After halving, theoretically reduce the daily supply of BTC by 50%, but this imbalance will theoretically only lead to a doubling of the BTC price. The stock market does not It may promote a rise of dozens of times to hundreds of times. Is it because halving the price increase attracted large-scale market entry, or is the Dow Jones bull market pushing money to BTC?
Let’s make another bold guess: Satoshi Nakamoto deliberately set the halving time to the time when the US president takes office, which is November every four years. It happened that the first time bitcoin was halved on November 28, 2012, also in the month of Obama’s re-election. After that, because the growth of Bitcoin’s computing power (especially the emergence of ASIC miners) far exceeded Satoshi Nakamoto’s vision, the halving time was continuously advanced, the previous time was in July 2016, and this time Coming soon to May 2020.
Why is Bitcoin price highly correlated with the US Dow Jones Index? I think apart from the fact that Bitcoin is basically denominated in US dollars and the US has a legal legal currency channel, assuming that we are middle class in the US or someone or institution that holds more US dollar assets, we know that the purchasing power of the US dollar will definitely depreciate. What? After 2008, real estate in the United States is not feasible (unlike several Asian countries that rely on real estate to support economic entities), so only U.S. stocks have added another BTC in the last decade. Moreover, investors in US stocks (mostly institutions) and investors in US BTC are highly coincident.
Why is there no such correlation in the Chinese market? On the one hand, it is the issue of the fiat currency channel, on the other hand, China ’s middle-class anti-inflation have all bought a house, and the basic quilt for buying stocks …
What happens after halving this year? Bitcoin and the Dow Jones index are almost positively correlated, and this year is not that simple. The second half of the year is the redemption period for US corporate bonds. The historical concentration of more than one trillion corporate bonds matures. US stocks and US bonds are a symbiotic relationship, which is why the United States will immediately launch a 20-year national debt plan. If the operation is not good, both cities may crash, so this year, Trump will have to clean up this mess after he is re-elected. Then the degree of water release determines the rise of Dow Jones. On the other hand, if the previous speculation is correct, then this halving will be the same as the last time, and will not rise immediately after the halving (it may decline because the halving is released in advance), but until November. After the US election, the president began to release water, Dow Jones began to rise, and the Bitcoin bull market really came.
If the Dow Jones crashes at that time, then the chance to verify our speculation is right. I personally speculate that if the Dow Jones crashes, then the probability of bitcoin will also collapse, because there is no second compliant bitcoin investment channel like the United States.
Why is bitcoin’s increase or decrease greater than the Dow Jones index? Because of the small market size of Bitcoin, it will amplify the volatility of Dow Jones. The simplest example is that Bitcoin has a market value similar to that of Tesla. The same amount of money to buy the entire US stocks and Tesla stocks can definitely increase It is dozens of times worse. But the volatility of the BTC market will become smaller and smaller as the entire Bitcoin market expands and matures.
I believe that with the continuation of time and the deepening of research, we will find more connections, make more speculations and get more verification opportunities, and finally hope for world peace!