STRC doomposting aside, I still expect BTC to underperform from here. BTC acts as an interesting asset on geopolitical uncertainty by acting as a chaos hedge, but that outperformance is short lived, just like when boomers play a game of chicken on Gold for the same purpose. In order for a real trend to take place, both need ample liquidity in the system. So first you get an initial spike on the shock, but once that shock subsides you are left with the fundamental picture of outlook on rates, liquidity, general risk appetite etc. and right now the fundamental picture looks like $100 oil with the Fed not being able to cut as much as they would like, DAT overhang and midterms coming up with Democrats leading. There are 2 times in the recent past where BTC has traded like this which are the 2022 Russia-Ukraine war and the 2023 banking crisis, both of which ended in underperformance after the initial chaos hedge/optimism spike. When I think about how this situation can get resolved: 1. Fixed quickly, temporary outperformance of BTC retraces compared to other risk assets (like 2023 banking crisis, BTC underperformed NDX until Blackrock filed for BTC ETF in June) 2. Does not get fixed, second order effects start taking place (like 2022 Russia-Ukraine war where we rallied from 34k to 48k, but inflation from higher oil prices contributed to additional Fed hikes and lower liquidity in the system) Decorrelation is mostly a fantasy that never lasts long, and BTC is the most correlated to the system it has ever been with ETFs and DATs
