Normally, USD #interest rates going up drive foreign capital into the/dollar, because A) the disparity between it and local currency rates drives inflation locally, and B) most nations have some USD denominated debt (eurodollar debt) and rising rates make that debt harder to roll or service in the case of floating rate debt. A lot more of their currency comes into dollar assets on the momentum alone to escape the inflationary action from that sudden drop in demand:supply ratio.

Many people like to point out that #Bitcoin has not yet weathered a real crisis, at least in the global reserve currency terms, where the dollar goes deflationary (it DOES happen, just never for long). And it's a valid concern; such events send shockwaves around the whole interconnected monetary system. Obviously those long Bitcoin and short fiat (leveraged) are going to need to liquidate, which would be some downward pressure if we look at it in a vaccuum, and until a certain point, this could spiral dizzyingly.

BUT -- at a certain critical mass, when enough people outside of the local dollar market choose not to follow local currency outflows into the dollar, but rather, into Bitcoin, recognizing it as a better hedge against inflation, things could get very interesting. It'd represent a reduction in demand for dollars, which counters the disinflationary impulse. #Fed decisions to cut rates, which would inevitably come (always late and impotent) would exacerbate the situation, further making Bitcoin the more attractive option.

It wouldn't in itself necessarily be inflationary, because interest rates aren't money printing; lending is. This is why 2009-2019 was a silent depression, while 2020 surged amid treasury issuance. In times of crisis banks are tight with their money, due to counterparty credit risk, and low rates simply exacerbate this. Hence why #QE was turned to, four times, but still not enough to get lending to most anyone but big companies who bought back stock and didn't spend into the real #economy.

What it would be, however, is an increase in the demand:supply ratio for Bitcoin. Outpace the forced liquidations for covering leverage and living expenses, and you have what I can only consider to be an event that looks like escape velocity being achieved.

Not reaching it before the next downturn would mean a big ride of volatility ahead, though I don't foresee it being the cataclysm some chicken littles worry about. Had it come a few years ago, perhaps, but we seem to have crossed the line of institutional buy in of too big to fail ($2 Trillion is a lot bigger than Lehman or Bear Stearns were). But if we can #hodl and come out stronger, we'll have some real #FirstTurning shit on our hands.

Anyway, that was a really long way of saying #GM.