Large inflows for the Bitcoin ETFs
Also NVIDIA, no diminishing returns and the end of QT in Europe
Welcome to the Friday edition of the Ecoinometrics newsletter.
Every week we bring you the three most important charts on the topics of macroeconomics, Bitcoin and digital assets.
Today we'll cover:
Large inflows for the Bitcoin ETFs
NVIDIA: no diminishing returns
The end of quantitative tightening in Europe
Each topic comes with a small explanation and one big chart. So let’s dive in.
In case you missed it, here are the other topics we covered this week:
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Large inflows for the Bitcoin ETFs
The rate at which the ETFs are acquiring Bitcoins. That's the number one thing I'm looking out to gauge where the market is going.
It is going in the right direction.
Another week, another week of net positive inflows. If it continues like that, price will follow.
NVIDIA: no diminishing returns
"Bitcoin's growth is going to disappoint. Obviously it will be smaller than in the previous bull market. Just look at the pattern on the chart."
That's what I hear every time I bring the fact that Bitcoin can totally deliver parabolic growth in this bull market.
Basically the argument is that all assets are subject to a law of diminishing returns. The larger the market cap of an asset the slower it grows.
Some people think this is part of the laws of physics or something.
I disagree.
I disagree because we have plenty of counterexamples. This week I bring you another one: Nvidia.
If NVIDIA can grow like that, starting from a trillion dollar market cap, there is no reason Bitcoin can't do the same.
There is no such thing as diminishing returns, there is only assets with small markets. Bitcoin isn't one of those.
The end of quantitative tightening in Europe
Quantitative tightening is dead in Europe. The ECB started cutting rates this month. A modest 0.25% for sure, but the important point is that it's setting the trend.
Inflation in the Eurozone is stuck in the 2.3% to 2.9% range. It has been like that since November last year.
The ECB is paying lip service to the fact that they are still committed to fight inflation but let's face it they are accepting that as the new normal.
That has to make you question what the Federal Reserve is going to do in the US.
That’s it for today. I hope you enjoyed this. We’ll be back next week with more charts.
Cheers,
Nick
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