Relai 🇨🇭’s Post

Outside of our well-informed bubble, most people think that Bitcoin hit $100k simply because of Trump. I've heard this argument a lot recently. So I asked ChatGPT to take a look at this BlackRock paper (where they also recommend a 1-2% portfolio allocation) with the following question: "What's driving the Bitcoin price according to this doc?" Here's the answer: "According to the document, the price of Bitcoin is driven by several key factors: 1. Widespread Adoption Potential: The biggest driver for Bitcoin's price is the possibility of widespread adoption as a digital currency and store of value. This adoption is fueled by its decentralized nature, lack of government control, and ability to facilitate seamless and instant transactions across borders. 2. Scarcity and Fixed Supply: Bitcoin's predetermined supply cap of 21 million coins creates scarcity, which, combined with growing demand, supports its price. This scarcity can also lead to speculative hoarding, especially during periods of heightened interest or sentiment. 3. Geopolitical and Economic Factors: Bitcoin is perceived as a hedge against geopolitical fragmentation, inflation, and the erosion of sovereign currencies. Some governments moving reserves away from the U.S. dollar and into alternative assets like gold or Bitcoin further supports its value. 4. Market Sentiment and Momentum: Bitcoin's price is heavily influenced by investor sentiment, narratives around its adoption, and market momentum. Positive developments, such as supportive statements by influential figures or organizations, can drive significant price increases. 5. Macroeconomic and Fiscal Trends: Persistent government budget deficits, rising debt levels, and higher inflation rates make Bitcoin attractive as an alternative to traditional financial assets. 6. Volatility and Speculation: While Bitcoin's volatility is a risk, it also attracts speculative investors looking to capitalize on its price swings. Its uncorrelated nature with other major assets can drive demand during periods of market uncertainty or risk-off environments. These drivers underscore Bitcoin’s role as both an emerging financial asset and a speculative investment tied to broader macroeconomic and technological trends."