New research suggests Bitcoin (BTC) could hit record highs, but it could just be another bubble.
An expert analyst Material Scientist, who presented a theory that could irritate Bitcoin bulls, found that there appears to be a strong connection between Bitcoin’s price cycles and China’s long cycles.
Doubts the power of halving Bitcoin
Since the BTC / USD pair peaked in April 2021, there are high expectations for a new pair before the end of the year.
When we look at the history of Bitcoin, the material world shows that the peaks in the previous Bitcoin cycle coincided with the peaks in the Chinese debt cycle.
The tide – which we saw this year in April versus today – represents a cold snap in Bitcoin. The analyst argues that not only does this mean that bitcoin behaves like all other assets, but that the supply pressure after every halving is irrelevant.
He shared his ideas with investor Ray Dalio, who is renowned for his research on China’s economic behavior.
“I think Dalio is right that bubbles are caused by debt cycles,” he said in a comment on Twitter.
“So about the history of cutting BTC in half, that’s BS, and that goes for the Chinese debt cycle as well.”
The halving narrative requires bitcoin to rise in value relative to unlimited assets, thanks to a mathematically calculated decline every four years. These increases should be higher than the previous ones and should be clearly visible in tools such as the family of stock flows with bitcoin pricing models.
With the focus on China and its debt thanks to the Evergrande disaster and earlier thanks to the coronavirus, the response to the idea of a debt cycle has been favorable.
One of the responses highlighted that bitcoin whales are selling their assets after every peak in China’s debt cycle, not excluding April 2021 as the most recent high in history.
With the ongoing downturn, the outlook for tensions on BTC prices looks more favorable.
Bitcoin Liquid Index vs. China Debt Cycle Data vs. BTC / USD Chart (Excerpt). Source: Material World / Twitter
As Cointelegraph reports, Dalio himself was recently in the news regarding his position on Bitcoin.
Related: “Best Bear Market Ever” – 5 Things To Look Out For In Bitcoin This Week
He warned this month that regulators could still “kill” her with unfavorable policies – something that his most prominent representatives vehemently rejected.
Among them is Sifidan Amos, author of The Bitcoin Standard, who claims that as the most sophisticated money ever created, Bitcoin will become an inevitable purchase for governments, even if its unbreakable properties force them to relinquish their power over money.
This week, Alex Gladstein, chief strategist at the Human Rights Foundation, discussed the concept of bitcoin as the “Trojan horse of freedom” when it comes to state monopolies.