To investors,

Bitcoin almost broke the previous all-time high of $69,000 yesterday. It came within $500 and has since retreated from the milestone. Given the persistent demand for the digital currency, and the lack of new production in response to this increased demand, we should assume that bitcoin will hit a new all-time high price in the next few days.

This leads to the question “what happens when bitcoin hits a new all-time high?”

Analyst Dylan LeClair points out that bitcoin’s price has doubled very quickly each time it has eclipsed the old all-time high.

This is hard to fathom, but bitcoin’s price doubled in 18 days or less in 3 of the 4 times that the asset hit a new all-time high. This is what it looks like when people talk about “price discovery.”

The world is trying to figure out what bitcoin is worth. It has determined that the 2022 valuation of $17,000 is wrong. Where the asset price will go, no one knows.

We shouldn’t discount the past though. Bitcoin’s price is up 20% in the last week. It is up 60% in the last month. And the asset is up 200% in the last year. These are big numbers for any financial asset, but especially a controversial one that has been heavily debated publicly for 10+ years.

We can’t evaluate bitcoin’s future solely on price. The past performance around all-time highs can serve as a guide, but we have to remember that the bitcoin halving is less than 50 days away. As this event occurs, I anticipate that there will be just as much, if not more, demand for bitcoin.

This means that the demand will outstrip available incoming supply by at least 20:1. That ratio is unprecedented in global finance for any period of sustained time. We have seen 10-12x more demand than what the network is producing for the last 2 months.

So the idea of that imbalance increasing in favor of bitcoin holders, and continuing to do so for many more months, would likely create a rapid appreciation in price.

Lastly, BlackRock filed regulatory paperwork yesterday to get clearance to put some of the funds from their Strategic Income Opportunities Fund into a bitcoin ETF. That fund, which is a $36 billion conservative bond fund, signals a potential new source of capital inflows into bitcoin — trillions of dollars of existing funds that need to find a home in an asset that performs better than the current asset allocation.

As I said on CNBC this morning, it is hard to construct an argument that is not bullish for bitcoin in the short-to-medium term. Obviously, I don’t understand the future any better than anyone else. I am merely looking at the data and trying to figure out the probabilities of various outcomes coming to fruition.

You can watch the full segment here:

The data is overwhelmingly telling us that bitcoin has a bright future ahead of itself.

Hope you all have a great day. I’ll talk to everyone tomorrow.

-Anthony Pompliano

Darius Dale is the Founder & CEO of 42Macro.

In this conversation, we look at their Weather Model and what it is telling us about stocks, bonds, bitcoin, we also talk about global liquidity, inflation, and impact of politics on financial markets.

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Bitcoin Continues To Look Bullish Against Macro Backdrop

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