BREAKDOWN: This Bitcoin Dip Was Not Caused by FUD
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 22 January 2021
⏱️ 15 minutes
🧾️ Download transcript
Summary
While there was plenty of FUD flying around, it wasn’t the real reason prices pulled back so significantly.
This episode is sponsored by Nexo.io.
Today on the Brief:
- Home sales up, home supply down
- Biden’s first test on the stimulus
- Euro pessimism
Our main discussion: Why the bitcoin dip wasn’t caused by FUD.
Anyone paying attention this week had reasons for frenetic worry. Janet Yellen’s comments on criminal activity. Persistent questions around Tether. A non-story about a double-spend that got amplified by mainstream media.
In this episode, NLW argues that none of these actually explains the dip. Instead, he argues, they were used by sophisticated traders to amplify the dip’s impact.
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Transcript
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| 0:00.0 | Are these fud stories having an impact? Certainly some, especially with nervous new buyers. |
| 0:04.7 | But their biggest impact is in being fodder for two opposite but equally relevant narrative |
| 0:09.8 | engines. On the one hand, those who are trying their next explanation for why Bitcoin sucks, |
| 0:14.7 | and on the other hand, those who are simply trying to capture it low. |
| 0:19.6 | Welcome back to The Breakdown with me, NLW. |
| 0:23.6 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:30.6 | The Breakdown is sponsored by nexo.io and produced and distributed by CoinDesk. |
| 0:36.6 | What's going on, guys? It is Friday, January 22nd, and today we are reinterpreting the dip that |
| 0:43.7 | we've seen this week away from the popular narrative. First up, however, let's do the brief. |
| 0:50.7 | Let's look at the U.S. housing market. This is a topic that I've seen a lot of interest in, even though it's obviously decidedly far away from the world of crypto. |
| 0:59.1 | But U.S. home sales reached their highest level in 14 years last month. |
| 1:04.6 | Sales of previously owned homes were up 22% between December 2019 and December 2020. |
| 1:10.8 | The important driver, of course, has been low mortgages |
| 1:13.6 | thanks to ultra-low interest rates. At the same time, there is a huge inventory problem. |
| 1:19.7 | There were 100.07 million homes for sale at the end of December, which is down 16.4% from |
| 1:25.9 | November and 23% from December 2019. At the current sales pace, |
| 1:31.2 | there is a 1.9 month supply of homes, which is a record low. So two interesting things about |
| 1:36.9 | this. First, again, we're seeing the tail of two markets, those who have the savings to buy |
| 1:41.8 | versus those who have to rent. Even within the buy market, I think the tail is a little bit more complex. |
| 1:47.9 | Some are taking advantage of rising prices to sell for a profit while others are nervously |
| 1:53.0 | holding on. |
| 1:54.1 | The average length spent in homes has increased significantly. |
... |
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