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Source: SAIHEAT Saire Technology
Original title: Bitcoin Price, Dow Jones Index and the US Presidential Term
Looking at the K-line monthly chart of Bitcoin in the past 10 years, I accidentally looked at the Dow Jones Index Looking at the K-line monthly chart in the past 10 years, we found that the overall trend is very similar: with a four-year cycle, Bitcoin and the United States have been in a bull market for nearly 10 years!
I took a screenshot of the monthly K chart of the Dow Jones Index in the past 10 years, and marked the occurrence time points of the highest price (green line) and lowest price (blue line) in each bull-bear cycle of Bitcoin, and also marked the occurrence time of the U.S. The month of the presidential election is marked with a yellow line:
The conclusion reached is:
1. The presidential election year is also the year of the Bitcoin halving;
2. During a single presidential term (4 years), the monthly K-line of the Dow Jones Index begins to rise rapidly after the president takes office. Rising to a cyclical high point, the time difference between this high point and the high point of the Bitcoin price cycle is no more than 1 month;
3. After the bull market of the Dow Jones Index, the lowest point of the monthly K-line and the lowest point of the Bitcoin price after the bull market appeared in Almost the same time.
This should not be a simple coincidence, so I also made a bold guess:
1. If the president is re-elected or takes office, he will vigorously develop the economy (including printing money and releasing water), which will bring the Dow Jones Index to a rapid rise and a new high. One year before the mid-term election or the change of office, due to uncertainties about re-election and the sustainability of policies, the Dow Jones Index also began to consolidate and enter a bear market;
2. The price and cycle of Bitcoin are highly correlated with the Dow Jones Index and the "USD economy". After all, the US dollar It is the main medium for Bitcoin transactions, and the United States has a compliance market;
3. Bitcoin’s halving market is actually a rapid rise after the halving. To be more precise, it should start after the US presidential election. The next election It's November this year, you know.
further analyzed, if the U.S. stock market does not rise sharply and have a bull market after this year’s election, will BTC’s dozens of times increase still occur? I think from the perspective of the stock market, the halving can indeed break the existing supply balance. After the halving, the daily supply of BTC will theoretically be reduced by 50%. However, this imbalance will theoretically only cause the price of BTC to increase several times, and the stock market will not It may promote an increase of dozens or hundreds of times. So is it because the halving price increase has attracted large-scale entry into the incremental market, or is the bull market in Dow Jones driving funds to overflow into BTC?
makes another bold speculation: Satoshi Nakamoto deliberately set the halving time to the time when the US president takes office, which is November every four years. The first Bitcoin halving happened to be on November 28, 2012, the same month that Obama was re-elected. After that, because the growth of Bitcoin’s computing power (especially the emergence of ASIC mining machines) far exceeded Satoshi Nakamoto’s imagination, the halving time continued to be advanced. The last time it was advanced to July 2016, and this time It will be moved forward to May 2020.
Why is the price of Bitcoin highly correlated with US Dow Jones Index ? I think that in addition to the fact that Bitcoin is basically denominated in US dollars and the United States has compliant legal currency channels, assuming that we are the American middle class or people or institutions that hold more US dollar assets, we know that the purchasing power of the US dollar will definitely depreciate, so how can we fight against it? What about dollar inflation? After 2008, real estate in the United States was not good (unlike several Asian countries that use real estate to support economic entities), so there was only US stocks , and one more BTC in the past ten years. Moreover, investors in U.S. stocks (mostly institutions) are highly overlapping with U.S. BTC investors.
Why is there no such correlation in the Chinese market? On the one hand, there is the issue of fiat currency channels, and on the other hand, China’s middle-class anti-inflation people are buying houses, and buying stocks is basically covered... What will happen after
is halved this year? Bitcoin and the Dow Jones Index are almost positively correlated, but this year it’s not that simple. The second half of the year is the redemption period for U.S. corporate bonds, with a historic concentration of more than one trillion corporate bonds due. U.S. stocks and U.S. debt are in a symbiotic relationship, which is why the United States will soon launch a 20-year national debt plan.If the operation is not good, both cities may collapse. Therefore, in order to clean up the mess after Trump is re-elected this year, we must release a lot of water. Then the degree of water release will determine the extent of the rise of Dow Jones. On the other hand, if the previous speculation is correct, then this halving will be the same as the last time. It will not rise immediately after the halving (instead, it may fall because the benefits of the halving are released in advance), but it will not rise until November. After the U.S. election, the president began to put pressure on investors, the Dow Jones began to rise, and the Bitcoin bull market really arrived.
If the Dow Jones crashes by then, then the opportunity will come to verify whether our speculation is correct. I personally speculate that if the Dow Jones collapses, Bitcoin will most likely collapse as well, because there is currently no second compliant Bitcoin investment channel the size of the United States.
Why does Bitcoin rise and fall more than the Dow Jones Index? Because the market size of Bitcoin is small, it will amplify the fluctuations of the Dow Jones. The simplest example is that the current market value of Bitcoin is about the same as that of Tesla. The same amount of funds can bring about an increase of buying the entire US stock market and buying Tesla stock. The difference is dozens of times. However, the fluctuation range of the BTC market will become smaller and smaller as the entire Bitcoin market expands and matures.
I believe that as time continues and research deepens, we will find more connections, make more speculations and get more verification opportunities. In the end, we hope for world peace!
