Second week of 2023, and it’s off to the races for Bitcoin

2022 was an unprecedented year of demand destruction and wealth destruction across financial asset classes. Bitcoin was down 75% from its all-time high. However, this is its fourth worst drawdown and continues to make lower highs each cycle.

For many a decade, the 60/40 portfolio of stocks and bonds protected investors in the worst of times as treasuries were able to hedge against the downside volatility in equities. However, treasuries performed even worst than equities, a feat that hadn’t occurred long before the ’60s.

In addition, U.S. stocks vs. bond returns were as bad as in 1931 and 1969. Subsequently, two years after both 1931 and 1969, was executive order 6102, the confiscation of gold (this is also where the difficulty adjustment in terms of 2016 blocks came from), and 1971 when the U.S. went off the gold standard. So by that nature, all eyes are on 2024.

For more info on this, please see our recent BitTalk episode