Bitcoin Takes a Dip as Global Money Supply Shrinks
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Following a recent all-time high, Bitcoin (BTC) is experiencing a significant price correction. This downturn is attributed to a global economic slowdown, marked by a substantial decrease in the global money supply (M2).
Financial expert Adam kobeissi warns that the global money supply has fallen by a staggering $4.1 trillion in just two months, dropping from $108.5 trillion in October to $104.4 trillion in December. This decline could further pressure Bitcoin prices,as historical data shows a 10-week lag between money supply changes and Bitcoin’s response.
Kobeissi,through The Kobeissi Letter,suggests that this trend could drive Bitcoin’s price down to $20,000,representing a 79% correction from its current value and the lowest point since january 2023.
MicroStrategy stays the Course, Buying Bitcoin Despite Market Downturn
Undeterred by the bearish market sentiment, MicroStrategy continues its aggressive Bitcoin buying spree. Led by founder Michael Saylor,the company has been purchasing more Bitcoin in 2023 than it did during the bull market of 2021.
On November 24, MicroStrategy acquired an additional 55,500 Bitcoin at an average price of $97,000 each, setting a new record. Despite the current market conditions, Saylor remains optimistic, even calling current prices a “bargain”.”Even at $1 million per Bitcoin, I’ll keep buying,” he recently stated.
MicroStrategy’s strategy has inspired other companies, including Bitcoin miners and firms like Metaplanet. Moreover,MicroStrategy’s recent addition to the nasdaq 100 index exposes millions of investors to Bitcoin indirectly through MicroStrategy stock.
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## Archyde Exclusive: Bitcoin’s Price Plunge – Is a Further Drop Inevitable?
**Introduction:**
Following reaching new heights, Bitcoin (BTC) is facing a notable price correction. concerns are rising about a potential further dip, with some experts linking this downturn to a shrinking global money supply.
Today, we are joined by Adam Kobeissi, the insightful mind behind The Kobeissi Letter, to shed light on this complex situation. Adam, thank you for joining us.
**Archyde:**
Adam,your recent analyses have highlighted a worrying trend of a shrinking global money supply. Could you elaborate on this observation and its potential impact on Bitcoin’s price?
**Adam kobeissi:**
Thank you for having me. Indeed, we have witnessed a staggering $4.1 trillion decrease in the global money supply (M2) in just two months, dropping from $108.5 trillion in October to $104.4 trillion in December. Historically, there’s a 10-week lag between these money supply shifts and Bitcoin’s price response. This worrying trend suggests further downward pressure on Bitcoin prices in the coming weeks.
**Archyde:**
Your predictions suggest a potential drop to $20,000, a 79% correction from the current value. What factors led you to this conclusion?
**Adam Kobeissi:**
This projection is based on the past correlation between money supply changes and Bitcoin’s performance. We saw similar patterns in 2018, when shrinking money supply led to a significant Bitcoin correction. Furthermore, current macroeconomic headwinds and global recession fears exacerbate the situation, potentially amplifying the impact on Bitcoin.
**Archyde:**
Despite this bearish outlook, some companies like MicroStrategy continue to invest heavily in Bitcoin. What message does this send to investors?
**Adam Kobeissi:**
MicroStrategy’s unwavering belief in Bitcoin’s long-term potential is commendable. Their strategy seems to be centered around a long-term investment horizon, viewing these short-term fluctuations as temporary. They are essentially betting on Bitcoin becoming a mainstream asset class, undeterred by short-term market sentiment.
**Archyde:**
what advice would you give to individual investors navigating this volatile market landscape?
**Adam Kobeissi:**
It’s vital to remember that the crypto market is inherently volatile. Do your research, understand your risk tolerance, and only invest what you can afford to lose. Diversify your portfolio and consider dollar-cost averaging to mitigate risk. Most importantly, stay informed about market trends and economic indicators to make well-informed decisions.
**Archyde:**
Thank you, Adam, for providing your expert insights.
