[EMM_386]

The silly thing is that crypto is now following the stock market for the most part, at least the big coins like BTC/LTC/Doge/etc are.

Market goes down, crypto seems to go down with it. Look at something like 1-month BTC and 1-month APPL or something.

It's not supposed to be doing this. I think this is happening because it's become so easy to purchase that people now just have it in their "portfolio", basket of everything, and when they want to sell, they just sell everything, stocks and crypto. They are the same thing to a lot of people.

This means it is getting tied into the existing financial system anyway, even without specific "controls" like central banking.

[ur-whale]

> it is getting tied into the existing financial system

The fact that its price somewhat correlates with the stock market and the fact that two parties can exchange bitcoins without any government being able to prevent the transactions from happening are two entirely unrelated things.

What's more, the first matters little (only because volatility can sometimes be annoying), while the second is an essential, even defining property of the system.

> It's not supposed to be doing this.

Why not? Again, Bitcoin was designed to solve one problem: allowing economic entities to exchange value freely.

Other than - maybe - the fixed supply, nothing was ever built in the protocol to control its price.

[saurik]

> It's not supposed to be doing this.

Is it really not? Both stocks and cryptocurrencies act as inflation hedges against the central bank.

[grey-area]

It’s really not. It is highly correlated with high risk assets and growth shares. It is anything but an inflation hedge, which is why it has been plunging as inflation rises and will fall more if interest rates rise.

If it were an actual currency things might be different, but instead it’s just another high risk speculative asset.

[ashwagary]

Just because BTC is temporarily correlated with risk assets, that doesnt mean it wont change.

Also, it's better to look at charts by starting at the beginnning of this 4 year cycle, dont pick out a bearish 6 month period and falsely claim BTC fails the inflation test. Short termism and Bitcoin's monetary policy are incompatible.

[zepto]

It certainly fails the inflation test without any doubt today.

You seem to be saying that it might pass it in the future.

[ashwagary]

Wrong, real inflation has been rising at an alarming rate for more than a decade, it didnt start in Q4 of 2021.

If you choose to measure BTCs performance poorly (3-6 month windows), you are just feeding yourself a false conclusion since Bitcoin had a 5,000,000x return over the past decade.

[zepto]

You’ll need evidence for that, and a way to disambiguate Bitcoin’s performance as an inflation hedge from the speculative bubble.

> it did a 5,000,000x plus return in that time

Then it is self evidently not an inflation hedge.

[repomies69]

Both cryptocurrencies and stocks are traded with leverage these days, and central banks control the price of leverage. So, if central banks decide to start raising interest rates, asset prices will go down because leveraging becomes more expensive.

[wickoff]

Crypto has cooled off considerably during the last few months. It's kinda drifting on the waves of the stock market. It needs a new narrative to become "hot" again, than it'll decouple.