Inflationary Illusions
What is the price of Bitcoin when the ruler we measure it in continues to shrink in size? Did we really hit an ATH? Is there a reason this cycle feels very different to previous ones?
Inflationary recessions create monetary illusions — Paulo Macro
G’day Folks,
I love this quote, and I have found myself thinking about it often. The concept that inflation can create illusions and divergences between what we see, and how we feel.
As you know, the behaviour and sentiment we see within Bitcoin onchain data is directly related to the way investors feel about the current environment. The more in profit or loss they are, the more likely they will do something about it.
In today’s piece, I want to explore this concept of inflationary illusions as it relates to the Bitcoin price. I believe it holds one of the keys to why this cycle feels very different to previous ones.
Through this process, I will also show you accounting for inflation can yield a more representative MVRV Ratio and drawdown metric which I think really speaks to how the Bitcoin price makes me feel right now.
Without further ado, let’s get into it.
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