With Accelerating China Issues, What Is Bitcoin’s Place In Macro?

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“Fed Watch” is a macro podcast, true to bitcoin’s rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies.

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If we zoom out, the last period with weekly candles similar to the time of recording was back in September-October 2020, right before the monster rally from $10,000 to $40,000. Of course, we aren’t saying that it will happen again exactly like that, but it is possible.

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The dollar index (DXY) is the other major currency we take a look at today. I believe it is important to check the dollar almost every episode because it is the main competition for bitcoin.

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Another similarity between Pakistan and Sri Lanka is the important role Chinese funding has played in the last decade. Sri Lanka lost control of their major port because they couldn’t pay back Chinese loans and now Pakistan is saddled with approximately $20 billion in high-interest loans to China and Chinese companies.

Pakistan has only two months left in the budget and are desperately courting new lenders. The Chinese have turned them down, the Arab states are thinking twice. The only place to turn is back to the IMF — and that means harsh austerity.

Perhaps unsurprisingly, both Sri Lanka and Pakistan are important nodes in China’s Belt and Road Initiative (BRI). 

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I’ve been discussing the Nancy Pelosi situation and the Chinese response for days on my Telegram live streams.

In this episode of the podcast, I read some excerpts from a noted Chinese minister and a Chinese think-tank expert. You can read Wang Yi’s full comments here. Suffice it to say for this article, he repeated “One China” many times and said the U.S. is the side trying to change the status quo. He also had very harsh words for Tsai Ing-wen, the sitting President of Taiwan. He said she “betrayed the ancestors.” In another translation, I heard Yi’s original comments also said she betrayed her ancestors [and her race].

The next comments I read were from Wang Wen, executive dean of the Chongyang Institute for Financial Studies at Renmin University of China (RDCY) and the executive director of the China-U.S. People-to-People Exchange Research Center. He tries to explain why China’s response was so weak and that China should not provoke an armed conflict with the U.S. until it can “outperform the U.S. in terms of economic power, attain financial and military strength comparable to that of the U.S. and develop an overwhelming capacity to counter international sanctions.”

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This is a guest post by Ansel Lindner. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.

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