Why Yesterday Was One of the Most Illuminating Days in Bitcoin’s History

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 12 November 2021

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by NYDIG. Yesterday was quite the day. A 6.2% inflation print led to a new bitcoin all-time high. Within hours, however, BTC’s price crashed 10% on an overall risk-off move in markets. That was precipitated by rumors that China’s Evergrande was about to default on its debts. NLW argues that the moves show how market structure and macro realities impact bitcoin. NYDIG, the institutional-grade platform for bitcoin, is making it possible for thousands of banks who have trusted relationships with hundreds of millions of customers, to offer Bitcoin. Learn more at NYDIG.com/NLW. Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Dark Crazed Cap” by Isaac Joel. Image credit: Ildar Abulkhanov/iStock/Getty Images Plus, modified by CoinDesk.

Transcript

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0:00.0	It seems insane that these two different huge things, the inflation print on the one hand and
0:06.2	Evergrand rumors on the other, could happen just so close together and have such totally opposite
0:11.8	effects on Bitcoin, but that's exactly what happened. Bitcoin ripped to a new all-time high
0:17.2	on the inflation news, then news of a real concern plus a rumor around Evergrand
0:21.5	cent markets all types of risk off.
0:24.9	Welcome back to The Breakdown with me, NLW.
0:29.1	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:36.2	The Breakdown is sponsored by Nidig and produced and distributed by Coindesk.
0:42.6	What's going on, guys? It is Thursday, November 11th, and I'm not sure I've ever seen a single day
0:49.7	that so totally encapsulates Bitcoin's relationship to macro and market structure as yesterday.
0:58.3	So let's begin where we left off on yesterday's show.
1:02.5	If you'll remember, inflation numbers had just come out.
1:05.7	We printed the highest numbers in more than 30 years, seeing 0.9% month-over-month inflation and 6.2% higher overall.
1:16.7	What's more, as we discussed, there are many who were pointing out that if we use the inflation
1:23.1	formulas and how they calculated this in the 70s, that we were already in the 14 plus percent
1:29.2	inflation range that we associate with the incredibly high inflation period of the late 70s.
1:35.8	This was totally cross-cutting, right? This conversation was not at all limited to Bitcoin
1:41.1	Twitter. It was the thing that macroeconomic Twitter and traditional finance
1:45.9	Twitter were talking about as well. Now, of course, an inflation print this high has some
1:50.9	pretty big implications for, well, a lot of different people. For the Fed, it puts them in a real
1:57.4	rock and hard place situation. On the one hand, they have this growing inflation, which would
2:02.5	suggest for a more hawkish policy, a faster withdrawal of the bond buying support that they've had
	...

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