In case you haven’t been watching closely, Bitcoin and the crypto currencies have been on the move again. After consolidating over the summer Bitcoin last week reached as high as $4962, while Litecoin basically doubled in the span of a week, going from $45 to $92.
So why the big move now? Why do the cryptos continue to rise this year? There’s been amazingly little discussion of cryptos at all in the mainstream financial media, and few have offered a better explanation than the one that continues to be heard most often.
Which is basically that the cryptos are signaling the beginning of money flows exiting the dollar. In fact the cryptos continue to trade in the manner that many would expect in the precious metals were gold and silver not being manipulated via paper contracts.
During this same time period when Bitcoin and the cryptos have soared, the dollar has been getting crushed, at least as measured by the DXY dollar index (although that’s hardly the best measure of the dollar, as it measures the dollar as compared to other fiat paper currencies). All while political dysfunction, threats of new wars, and continued unchecked spending continue to grow each day.
While it’s perhaps early to say with certainty that the system has begun to crash, the indicators are flashing the warning signal. Added to the fact that the way the metals are being manipulated would tend to lead towards an outcome where the moves will be extreme when the market finally corrects, being ready for a repricing of all major asset classes is recommended.
While some believe the cryptos have become a bubble, it continues to seem more likely to me that the move is a result of investors losing faith in the stock, bond, and real estate bubbles. And perhaps an indication that similar explosive moves in precious metals could be coming soon.