Quote:
Originally Posted by Pawnmower
i mean, i have been wrong before on this type of stuff but I always thought one of the reasons BTC was so high in the 1st place was excess liquidity, and free money (near zero rates).
These things lead to rampant speculation, and thats all that BTC is is speculatory.
So if you remove liquidity and raise interest rates, I think it is natural that speculatory things like tech companies that make no money, houses that cost more than they should, and digital coins that have no real value other than speculation are going to come back down in price.
We are entering a period of more normal interest rates and normal liquidity.. so i think prices should normalize. Many people mistakenly think this is "high interest rates" or that we are in a very restrictive liquidity situation right now. Its not. We aren't. These rates are normal and there are still YEARS worth of excess liquidity in the market that need to be removed through QT.
Full disclosure: I am not a huge believer in bitcoin so take all this for what its worth, but I wouldn't be surprised if BTC goes very low if the normal rates and liquidity persist...
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The problem with rates being back to "normal" is housing costs are way out of whack with these "normal" rates. And people waiting for housing prices to drop don't seem to understand that its simple economics. Supple vs demand. We are over 11 million SFH short.