Bitcoin and KOSPI

ByteFolio Issue 210;

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This issue covers Near (NEAR) and HyperLiquid (HYPE).

Bitcoin’s ByteTrend Score drops to a 2. The price has hit resistance at the 200-day moving average, but we are still seeing higher lows.

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Bitcoin

Source: Bloomberg

The ByteTree Money Map firmly places bitcoin in a macroeconomic regime, which favours a liquidity-fuelled environment. That is when money creation is at its max, with bond yields and inflation rising. With bond yields spiking higher and energy-induced inflation from the Strait of Hormuz, that is where we are today.

The ByteTree Money Map

Source: ByteTree

In this chart, I have combined 2-year rates and inflation expectations. Over 10 years, the link to Bitcoin is quite strong. Obviously, the price of bitcoin is determined by many other things, but the big rises and falls have been linked to major changes in monetary conditions. In the current environment, I would reasonably expect more from Bitcoin.

Bitcoin and Rates

Source: Bloomberg

Yet, as with all data imperfections, there are reasons. For example, the chip sector has run wild, as expressed by Korea’s KOSPI Index. While Bitcoin and KOSPI have historically been correlated, they diverged last summer, with the attention shifting towards chips.

Bitcoin vs Kospi

Source: Bloomberg

Yet start the clock in late 2022, when the bull market for stocks and Bitcoin began. People say the Kospi is a gargantuan bubble of our times, but Bitcoin has done more, even after the correction.

Bitcoin vs Kospi – Rebased to the End of 2022

Source: Bloomberg

It is a reminder that Bitcoin is a high-return asset. The cycle should turn up later this year, when great things will happen. Also consider that Bitcoin could be part of the anti-bubble trade, which is very exciting indeed. Maybe when the chips go soggy, Bitcoin will step back in.

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