Floating units are always measured in fixed units.
This chart comparing bitcoin’s price to M1 money supply shows us how Bitcoin might preserve real purchasing power in the face of erratic monetary policy changes.
Bitcoin wasn’t the bubble. The Fed was.
Isn’t a big part of the story there that BTC’s price in USD is very rate-sensitive? So when money supply goes up, discount rate goes down and “risk assets” - including BTC, for now - increase due to the DCF model?
I’m not sure. I only understand these things on a very basic level. I’ll do some reading and get back to you.
There are also some other measures of money supply that paint a prettier picture. Here’s BTC’s price against those:
Sounds good mate
My post was uninformed and misleading. I just found the linked article, which says that in April 2020, the fed started counting savings account balances in M1 money supply for the first time, explaining the 500% spike at that time.
I’m baffled that they’d just trash the M1 chart like this. It’s now useless. If I did this at my job, I’d be fired.
https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/
Thanks for sharing. Seems like as a measure of liquidity in the money supply, it’s just reflecting what has changed. I can see how it’s frustrating that it’s a break in the time series, but it’s just showing liquidity at the end of the day
