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5) On the other hand, this is likely destabilizing for Eastern European currencies. And, more generally, for Eastern European financial systems. Which means they might be looking to alternatives. If you were in Ukraine right now, where would you trust your money?

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6) So there are arguments both ways for what should be happening to BTC right now. I'm not really sure I would have guessed it would go down based on the fundamentals. But it is down, a lot! Why?

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7) Well, let's say there are 2 types of people in the world: fundamental investors and algorithm followers. Fundamental investors look at the situation and are uncertain which direction BTC/USD should move. Algorithm followers consult the data. Historically, what's the trend?

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8) Well, over the last year, there's been a really high correlation between crypto and equities. The main reason is monetary policy: moves in expectations of inflation and interest rates change USD and other fiat currencies. More inflation --> crypto + equities up vs USD.

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9) And so the algorithms look at the data, and decide based on that BTC should be 80% correlated to the S&P500, with a beta of 4 (i.e. if S&P500 moves 1%, BTC moves 4%). Then war happens.

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10) Fundamental investors are neutral, but algorithmic investors see the S&P500 go down 4%, and so expect BTC to go down 4*4%=16% based on historical studies.

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11) There's a push and a pull, with fundamental investors buying and algorithmic investors selling; on net, BTC ends up halfway in between, down 8% on the day. So, who's "right"?

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12) Well, I don't know. Maybe the algorithmic investor is: maybe we *think* this is about financial systems but actually the dominant effect is just everything selling off to fund wars. But maybe they're not: maybe they're basing their judgements on monetary policy moves.

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13) But this isn't a monetary policy move. So BTC goes down 8%, half of the 16% that the algorithmic investors predict. At which point their model updates a bit--BTC went down less than the 4x they predicted--and a cycle begins. Maybe.

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14) Or maybe the real effect here has nothing to do with any of those things. Maybe it's liquidity. If you're risk averse, maybe you're selling whatever you have right now, because who knows what'll happen. And markets are illiquid right now--who's buying volatile assets?

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15) Anyway, who knows what will happen--anything could and I don't mean to imply that I know what will happen. But I also think we're probably in a new regime than we've been in the last year and a half. We'll have to see how things work here.

7:14 AM · Feb 24, 2022Twitter Web App

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16) And again, go do something nice for someone. The world could use it right about now.

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Open your wallet and make something happen. The market is illiquid as you said.

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@rlvvcap90042128

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Are you now predicting a boom or a doom?

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buy in the dip.

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Sir your my inspiration my preceptor

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He's justt saying stop brainstorming, do as you wish but stay safe because the markets are sensible. And do something nice for someone, which i completely agree with.

Exempli gratia - EG

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Biggest game changer

, could be if happen, but is most likely it will: SWIFT ban For Russia Federation (part of Westerns sancions). In that case future 200 milion 4-5 world economy Russian Federation need financial alternative ( as we know, this exist ) $BTC - crypto

BitcoinT.I.N.A.-- There Is No Alternative

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The world is in a new regime from the last several decades. Things changing fast, it's just not obvious to most yet.

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