Thread by @Darky999

Question: Is #BTC a 'store of value'? New hypothesis from me follows

Answer: No - of course it's not objectively by price action over last 2 weeks (anyone that says other is honestly deluded), BUT there might be a subtly to consider...

@RaoulGMI @DTAPCAP

1/N

#bitcoin got dumped SUPER HARD the first -10% SPX day, BTC got dumped -47% <---- anyone that says this is a store of value is smoking something very strong

HOWEVER...

The second massive SPX dump of -12%, BTC dumped by -25% (SPX dumped more remember...)

So half as much...

2/N

Why could this be?

My hypothesis - and it's a unproven hypothesis - is that upon the first SPX dump, liquidations occurred in Hedge Funds especially that meant literally everything got sold off, and what would you sell of first?

BTC - for sure (for most HF's that own it)

3/N

BTC is not going to be a large allocation, you are just gonna hit 'sell' as you need cash, and want it off your books. Then Gold, then Treasuries...

(lets ignore other assets for simplicity)

4/N

Now comes the second SPX dump, a LARGER dump that actually dumped gold the same as the first (5.7% both times... interesting...), but BTC dumped HALF as much

Why?

Coz the hedge funds got rid of it on the first dump, it was the first asset to get sold off entirely

5/N

If this has any truth to it, when another dump comes (which could well be today) & SPX flies down another c. 10%, will BTC only go down say half as much again (e.g. 10-15%)?

Maybe even fair better?

It's not widely held in traditional finance, so they can't sell forever...

6/N

We shall see, it's just a hypothesis, but I think it's interesting to entertain as the data on gold was v. consistent on both dumps...

Interesting in thoughts from folk who want a mature discussion :)