For those who, unlike me, follow every single Satoshi’s worth you may have noticed a steady but marked climb in the price of bitcoin over the last 2+ years. I find this interesting as it has outpaced the growth in other “value holding” assets such as Gold or in many cases Real Property.
I have a theory that a large number of consumers have turned to the growth of bitcoin as a hedge against rising prices generally. And some, although fewer, have used it as a high return savings account hoping for a time when interest rates would again fall to more natural levels.
Given the (we can argue on how likely it is to happen) expectation that The U.S. Federal Reserve will lower interest rates for the first time in around a year sometime this month (September 2024) financed assets should become less expensive month to month. I believe that a large amount of Bitcoin being held as an inflation hedge will be liquidated and poured back into real assets.
This leads indirectly to a conclusion that we will see at least a 20% price correction in the market if rates continue dropping, starting at 250bp/qtr for the next year finally leveling off around 3.74% around this time next year. This will drastically lower monthly payments and for those who see it coming this will be a clear signal to collateralize some of their BTC gains from the last 2 years. This money will move into the financing of downpayments for mortgaged properties ultimately re-stabilizing the Real Property market after a marginal, say 8% price correction coming around Oct 10th. This price correction will signal a short but bitter bidding bonanza from private equity and HNWI to buy up the available assets.
After this massive “buy-back” the Real asset prices will again climb up around 14% over the next 18-24 months.
What does this mean for BTC HODLer’s? Well it means the opportunity to buy-the-dip yet again.
TL;DR, internet rando writing nonsense, move along.
P.P.S, not advice, not your friend, not your advisor.