For the FED to give such cut, it means they're concerned about the economy (inflation still above target) or it's because it's presidential election.
Like TeeDub, I'm also concerned about where to cash out for bigger amounts. Unchained Capital is garbage. 16.42% APR for a loan. $150k minimum.
That is the market rate
for now. Because few institutions understand bitcoin. What will the interest rate be on a fully collateralized loan that:
1) Is more liquid than equities and real estate. (days to settle for equities, and possibly
months for real estate)
2) Trades 24/7/365
3) Has essentially ZERO risk for the lender, since the collateral can be immediately liquidated in the event of a margin call.
Once institutions start to grasp just how low the risk on such a loan is, there will be much competition to finance bitcoin loans, driving the interest rates
lower than other types of collateralized loans - well into the single digits.
I've noticed this as well, that Bitcoin and Crypto valuations in general follow global liquidity. I.E. lower interest rates = high bitcoin prices. That definitely isn't a profound revelation on my part.
But I think there is something going on physiologically here. Anybody on this forum would agree that in general the Western work ethic is dying, and people these days have been programed to want to get rich quick with as little actual work as possible. Look at all the YouTubers and instagram influencers and only fans stars. It is all rooted in the same general work ethic decline in the West.
This is a symptom of inflation. In countries with very high inflation (Turkey, Argentina, Brazil, Venezuela), grifting and scamming are basically a way of life. "Time preference" goes way up - instant gratification, get rich quick, spend today, because the future is highly uncertain. As inflation increases in the West, expect more people behaving this way...it is a subconcious reaction to decreasing value of money.
Now translate this understanding into crypto markets. The majority of people have no understanding of what real money is and isn't (the "true believers arguments for gold / bitcoin) and are instead looking to profit quickly. When money is cheap, people have more disposable income. They try to invest that in something that will get them rich quick. Therefore, they start buying bitcoin, which drives up the price.
Agreed. There are HODLRs that have been here for a cycle, and new entrants that will be attracted to "number go up." Lets say there are 10 million people world wide, that have a significant portion of their wealth in bitcoin. The bull run attracts 100 million people for "number go up". When we get to the next bear market, 80% of the new entrants sell everything, leaving 20 million new "HODLRs". The bitcoin price crashes from $250k to $50k in March 2026. The new "base number" of HODLRs, people committed, is now 3x what it was. Eventually, after the crash, the base level of bitcoin creeps back up to $100k.
I think this is why crypto prices follow global liquidity levels. It's driven by the phycology behind the normie "get-rich-quick" investors who have been handed printed dollars. (BTW, this is also true in the housing market. Thats the CORE reason housing prices skyrocketed over the past 5 years...)
Given that this is my understanding of the current Bitcoin situation, I'm going to play the game, but I wouldn't count on crypto holding "value" without QE and trillions of printed monopoly dollars. I'm not quite sure that a digital token is worth as much as a brand new Toyota Tacoma (65K, right...?).
Expect a crash, and be prepared for an 80% drop from the top. 80% crash from 250k is 50k.
Governments
have to print endless monopoly money. The global debt,
owed to someone, is $310 Trillion. The total "real" money (M1 money supply) is $18 Trillion. That means:
there is 17 times more money owed, than money that exists today. So if
all people,, businesses, and
all governments immediately stopped borrowing, and never borrowed another cent:
The worlds money must increase in supply 17x, or double in supply 4 consecutive times, to service the debt. But guess what, if inflation is roaring with all that money printing, smart people, businesses, and governments aren't going to stop borrowing,
they will borrow as much as they can. That is why Saylor is borrowing as much as he can in a weaker currency (USD), and buying a stronger currency (BTC). His loans will be paid off with money that is worth a fraction of what it was when he borrowed it.
TLDR: money printer go brrrr until fiat collapses.
