BTC - Don't Be Trumped - Stellar Year Ahead
BTC responded to the US FOMC interest rate cut as expected, it rose. But only just a little. The reason BTC rose these past couple of days is because a lower US interest rate "eventually" hurts the US dollar, which boosts the value of anything priced in USD. Thus a rise in BTC:USD.
But the USD did not fall in response to a cut in interest rates as it should have. Instead, USD rose. Why? Because FOMC chairman Powell stated that the FOMC is "not committed" to further rate cuts. People now believe there will not be any more interest rate cuts. Plus, the US economy in the near future still looks weak, as do the economies of the rest of the world. Investors are therefore flocking to the safety of the USD, driving it higher, and reducing their stock exposure, pushing stocks lower.
But don't be fooled by the recent rise in USD, the recent fall in US stocks, or the recent stagnation of BTC. The USD will fall and fall hard over the next 12 months heading into the US elections of November 2020, pushing US stocks and BTC higher, MUCH higher by then. How do we know that? Because US president Trump is going to do anything he can to boost stocks in order to get re-elected next year.
In order to boost stocks, Trump needs to force the FOMC to keep cutting interest rates and weaken the USD. That's why today he announced a 10% increase in tariffs on imported Chinese goods, which hurt the stock market. He has threatened to increase those tariffs to as much as 25% if he has to. Plus, he is refusing to make a deal with China on trade talks in order to keep the pressure on the FOMC to cut rates. That's right. Trump is like a child who is throwing a temper tantrum just to get what he wants.
What this means for BTC investors is HOLD ON! Over the next few months the US FOMC will be forced to cut interest rates again. Then, when Trump is satisfied, he will sign a deal with China. This will give the US stock market a double-dose of steroids (one dose from lower interest rates, and another dose from the end of the trade war with China). This will set the US stock market on a moonshot that will last right into the November 2020 election, lifting BTC with it as the USD falls like a stone in water.
Don't be fooled by the current strength in USD. Trump will continue to do everything he can to crush the dollar in order to boost stocks and get re-elected. And BTC will ride on the coat tails of the US stock market once again like it did throughout 2017. And we all remember what BTC did in 2017, don't we?
But the USD did not fall in response to a cut in interest rates as it should have. Instead, USD rose. Why? Because FOMC chairman Powell stated that the FOMC is "not committed" to further rate cuts. People now believe there will not be any more interest rate cuts. Plus, the US economy in the near future still looks weak, as do the economies of the rest of the world. Investors are therefore flocking to the safety of the USD, driving it higher, and reducing their stock exposure, pushing stocks lower.
But don't be fooled by the recent rise in USD, the recent fall in US stocks, or the recent stagnation of BTC. The USD will fall and fall hard over the next 12 months heading into the US elections of November 2020, pushing US stocks and BTC higher, MUCH higher by then. How do we know that? Because US president Trump is going to do anything he can to boost stocks in order to get re-elected next year.
In order to boost stocks, Trump needs to force the FOMC to keep cutting interest rates and weaken the USD. That's why today he announced a 10% increase in tariffs on imported Chinese goods, which hurt the stock market. He has threatened to increase those tariffs to as much as 25% if he has to. Plus, he is refusing to make a deal with China on trade talks in order to keep the pressure on the FOMC to cut rates. That's right. Trump is like a child who is throwing a temper tantrum just to get what he wants.
What this means for BTC investors is HOLD ON! Over the next few months the US FOMC will be forced to cut interest rates again. Then, when Trump is satisfied, he will sign a deal with China. This will give the US stock market a double-dose of steroids (one dose from lower interest rates, and another dose from the end of the trade war with China). This will set the US stock market on a moonshot that will last right into the November 2020 election, lifting BTC with it as the USD falls like a stone in water.
Don't be fooled by the current strength in USD. Trump will continue to do everything he can to crush the dollar in order to boost stocks and get re-elected. And BTC will ride on the coat tails of the US stock market once again like it did throughout 2017. And we all remember what BTC did in 2017, don't we?
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