Bitcoin Jumps, Stocks Green

Bitcoin rose above $21,000 overnight, up 10% from $19,000, around at the same time as stock trading began in Shanghai.

That suggests demand for crypto has risen in Asia as both the Yen and the Yuan lose purchasing power over the dollar.

CNY has fallen more than 10% from just under 6.2 in February, to almost 7 per dollar, as the Yuan strengthening over 2020-21 gives way to a new devaluation of sorts.

China’s central bank has announced a number of rate cuts in the past weeks amid a slowdown in their economy, but has now started worrying about a capital flight.

In Tokyo, JPY has fallen to its lowest value since 1998, and is close to its lowest since 1990 as their currency crossed 140 to the dollar from 100 last year.

This weakening of Asian fiat currencies may have led to an increase in demand for bitcoin, both as a tool and as an investment.

But, there could be other factors too. A new package on energy by Liz Truss, the British Prime Minister, may well mean the energy crisis is over where markets are concerned, at least in UK.

A hike of 0.75% by the European Central Bank has led to some weakness in the dollar, with DXY down to 108 from 110.

This increase was bigger than some suggested at 0.5%, with Europe moving on energy too as the energy ministers decided today to price cap all gas imports.

“The Energy Council gave a clear signal to the EC’s Ursula von der Leyen,” said the Belgian minister of energy, Tinne Van der Straeten. “A price cap on all EU gas imports, not only on RU gas.”

“A swift implementation is now necessary, before the heating season starts. This can bring urgent financial relief for European households and industries,” she added.

That might solve the crisis in Europe too, at least financially, which should lower inflation and thus gives room for economies to continue growing.

While in Ukraine, a surprise attack has led to significant gains of land for the Ukrainian army, to the point the Dispatch says:

“It begins to look that the roles of puppet and puppet-master are reversing; the Ukrainians are starting to pull the strings and the Russians to do the dancing.”

The macro therefore might be turning, with bitcoin finally finding a new potential narrative to complement eth’s merge.

That is: will China’s economic troubles translate to bitcoin green? With just one data point, the answer is not clear.

But, the energy crisis is over, Ukraine is winning, inflation has peaked and Asia is re-entering the crypto market, can be the exaggerated and super optimistic hypothesis for the day.