Last Updated: 3 October 2022
The macroeconomic storm has all but subsided recently and bitcoin is still sailing in extremely troubled waters. Remarkably, bitcoin is still holding up quite well in all the macro violence, especially compared to traditional financial assets. The big question is whether bitcoin will manage to stay afloat if the waves get even higher.
“We can’t go down much further”
You’ve no doubt heard about Swiss investment bank Credit Suisse being on the verge of collapse. Credit Suisse is a bank that has been put on a list of so-called systemic banks by the Financial Stability Board. This means that Credit Suisse is a bank that will pull the entire financial system with it if the bank collapses.
In that sense, the world has a lot to gain from Credit Suisse being able to prop itself up or with help. Fifteen years after the fall of Legman Brothers in 2008, another critical moment for the global economy now seems to be looming.
We can't see inside CeFi firm Credit Suisse — JUST LIKE we could not see inside of CeFi firms Celsius, 3AC, etc.
But if Credit Suisse were a DeFi smart contract, it would be in a state of perpetual audit.
Everyone would know everything always.
That's DeFi. https://t.co/WiqMMjjpDB
— Mark Jeffrey (@markjeffrey) October 3, 2022
The entire financial world is heading towards the abyss at a time when inflation is going through the roof, we have to deal with a war in Ukraine and financial assets are experiencing their worst year in ages.
#Bitcoin price is already pushed down to the limit, well below 200 WMA. We’ve had contagion from UST/3AC and leverage flushed already. BTC is massively shorted as a hedge.
Even if Credit Suisse / Deutsche Bank collapse & trigger a financial crisis, can’t see us going much lower.
— Samson Mow (@Excellion) October 3, 2022
Incidentally, not everyone is negative. According to Samson Mow, this scenario could very well turn out to be very favourable for bitcoin. “Even if Credit Suisse or Deutsche Bank collapse and cause a financial crisis, I don’t see us going much lower,” said an optimistic Samson Mow.
Not everyone positive about bitcoin
Incidentally, not everyone shares Samson Mow’s view that this is a positive development for bitcoin. Henrik Zeberg, a popular macroeconomist on Twitter, predicts “the biggest deflationary crash since 1929.” Which means a lot of “air” will flow out of the markets, according to this economist.
All about #DXY
Correction coming which (w/plummeting rates) will send #Equities🚀
Largest Deflationary Bust since 1929 pic.twitter.com/VcHSrYbaR5
— Henrik Zeberg (@HenrikZeberg) September 27, 2022
In early 2023, he expects another rally in the dollar, which should take the Dollar Index to around 120. That should eventually trigger a crash bigger than those of 2007 and 2008.
Recently, the dollar has fallen back slightly, but according to Zeberg, it is mainly a matter of “catching one’s breath” for the world reserve currency for a while. After that, the dollar will continue its advance, according to this analyst, and that will almost have to come at the expense of bitcoin.