November saw bitcoin reach new local all time highs, but the more important statistic was that the correlation between bitcoin and the stock market fell significantly. One of the most important characteristics crypto must embody for the next bull run is to function as a hedge against stocks. The narrative in libertarian spaces is that quantitative easing is debasing the US dollar unsustainably, causing a break between stock prices and stock fundamentals. The stock market is basically an arm of government, and is completely dependent on bailouts and stimulus to stay afloat.
I tend to agree with this assessment for the most part. A new group of Ivy League idiots is trying to come up with an intellectual excuse to make the money printer Fed policy sound less stupid, and they landed on Modern Monetary Theory (MMT). MMT basically means that endlessly printing money is smart, justifying the policy and maintaining the egos of the folks implementing it.
Here's the part you probably won't like — there's nothing really wrong with MMT as a theory. If the world agrees and everybody debases, then the policy works. If there is one bad actor, however, that entity stands to move into financial supremacy by simply being efficient. Austerity is never popular with a population, so the "bad actor" is more likely to come from a nation with more centralized power structure like Russia or China. Because these nations are competing with the West and have their own independent financial structures, they will not hesitate to take advantage of the dollar's weakness. Because of this, MMT is practically very stupid.
Bitcoin Will Decouple...But Not Because of Bitcoiners
I hate the fact that most YouTube shills are celebrating the tradfi adoption of bitcoin. These LBRY Libertarians are a super hypocritical class of people who claim to be bootstrappers but still bow to the whims and wishes of people they call socialists. The more mainstream bitcoin goes, however, the more their bags pump, which is why they put out video after video celebrating mainstream partnerships and adoption.
Tradfi can produce some good things for bitcoin, however. You'll notice that bitcoin did not begin to decouple from the stock market until big announcements from tradfi institutions that they were investing in bitcoin. How can this be? When bitcoin is in the hands of LBRY libertarians, the crypto market follows tradfi. When tradfi investors get in, then tradfi and bitcoin begin to behave as independent entities.
The truth is that the LBRY libertarians have very weak hands, and on top of that are bad traders. Because this group of crypto holders is so intent on stimulus and tradfi adoption pumping their bags, a bear market in tradfi or news of Congress gridlocked on stimulus reduces their hope of a quick pump. They impatiently sell. When companies like MicroStrategies, Square and institutions like the Iranian central bank announce bitcoin holdings, bitcoin begins to decouple because now you have stronger hands in the market. These are institutions with a vested interest in protecting investors and stakeholders. They have stronger hands and professional traders under their employ. They realize the Westernized global traditional economy is trash, and they will help to FORCE the decoupling of bitcoin from tradfi so that they can protect their interests.
What Bitcoiners Have Yet to Discover
Bitcoiners give lip service to financial sovereignty, but really have yet to prove their allegiance to anything other than hoping for a crypto bull market to sell out back into fiat. The proof is in the pudding — before tradfi got into the crypto market publicly, bitcoiners did not believe in crypto enough to decouple the price of bitcoin or any altcoin from the traditional stock market.
If this is allowed to continue, we can expect tradfi to dominate the crypto space in a few years. They will rightly see the space as a great investment opportunity. The difference between these folks and bitcoiners is that tradfi will implement the focused and disciplined trading policy to make the decoupling a reality.
Bitcoiners have yet to discover that the implementation of Satoshi's vision depends on their attitude more than their financial position. Because the crypto market was unable to achieve the decoupling on its own, it betrayed a fatal flaw — disbelief in its own stated philosophy. This is blood in the water for the investment sharks that are chomping at the bit to move money profitably out of fiat. Right now, crypto looks like a tasty snack.
When Will the Decoupling Occur?
It's going to be sooner rather than later, because the institutions that are in the space look to be holding to the vision of crypto as a true financial revolution and bitcoin as an efficient store of value better than bitcoiners and LBRY libertarians. Tradfi is serious. Basically everyone who matters outside of Peter Schiff has bent the knee (which means Peter Schiff doesn't matter, lol), and tradfi institutions that haven't made the leap are probably just figuring out how to present the idea to their top stakeholders.
Based on this, I predict a full decoupling (which will correspond to approximately 35% correlation between) the stock market and the crypto space. No market is perfectly decoupled from another, but these two will be relatively independent.
