Bitcoin: Week 42

Each passing day brings us closer to a complete cessation of international relations and hyperinflation. And yet bitcoin clings to the floor.

News from the front

The sabotage of the undersea gas pipelines and the Crimean bridge torpedoed possible returns to the negotiating table. Moscow is now waging all-out war on Ukraine and a new front could soon open up north of kyiv.

General Sergueï Surovikine who supervises the hostilities did not go there by four ways:

“I am no longer willing to sacrifice Russian soldiers in a guerrilla war against savage hordes of NATO-armed fanatics. We have enough forces and technical means to lead Ukraine to total capitulation. »

In response, EU Foreign Commissioner Josep Borrell promised to increase EU military aid to 3.1 billion euros and train Ukrainian military [2000 en France].

The recent Russian bombings “will not shake our resolve, but will only strengthen it”he said from the top of his Brussels ivory tower.

President Zelensky launched for his part this Tuesday that there is “no room for negotiations with Putin”. This stubbornness comes as the Russian military recently destroyed much of Ukraine’s energy infrastructure, something Moscow had so far refrained from doing.

Many cities, including the capital kyiv, will be without water and electricity this winter.

“Two explosions filmed in kyiv. Two districts of kyiv were deprived of electricity and running water.
Some media claim that the authorities are preparing residents for the fact that they could be without electricity for a while.

President Putin said that “Russia could deliver about 27 billion cubic meters of gas [via Nord Stream II] “. “The ball is in the court of the European Union, if it wishes”.

No thanks. The old continent chose to align itself with American foreign policy and to flirt with the third world war.

European politicians preferred hyperinflation and years of recession. We are also captives of the United States, very happy to be able to sell us their gas surpluses five to six times more expensive than it is on their domestic market.

To the great displeasure of Bruno Le Maire, the very one who wanted “causing the collapse of the Russian economy” and who today takes offense at being extorted by Uncle Sam:

Europe was kindly rolled in flour by the Americans. Or how to devastate European industry while being thanked for selling it gas at exorbitant prices.

It is therefore to be expected that Mr. Biden will do everything to aggravate the situation, even at the cost of the destruction of Ukraine. Opposite, the Kremlin will probably accept nothing other than a neutral government in kyiv, the denazification of the country and the annexation of the Russian-speaking regions.

In short, we are heading for shortages and ever-increasing inflation. Which in turn will encourage more and more people to convert part of their euros into bitcoins.

And now the inflation of electronics?

Many don’t know that the United States dropped a bombshell on China last week. All American engineers working in China’s semiconductor and memory card industry have had to Choose between quitting their job and losing US citizenship.

The goal is to curb Chinese advances in artificial intelligence, supercomputers and weapons. Ultimately, it is obviously a question of bringing about a change of regime.

That said, American firms only control 10% of the market. The semiconductor heavyweights are now the Taiwanese TSMC and the Korean Samsung.

Nevertheless, these two countries are allies of the United States and will probably not be asked to sell only low-tech semiconductors to China. Like washing machines.

The European lackey is not left out. Dutch ASML also intends to comply with this electronic embargo. ASML (Advanced Semiconductor Materials Lithography) is the only company in the world to build extreme ultraviolet lithography machines indispensable to the manufacture of the best semiconductors.

Semiconductors are the Achilles’ heel of the Middle Kingdom. He imported 369 billion units from January to August. These imports cost $277 billion, more than oil imports.

However, it should be noted that China controls nearly 20% of the market. Admittedly, we are far from Samsung’s 3 nm chips. Not to mention TSMC, which is aiming for 1.4 nm within five years. But Shanghai industrially produces semiconductors in 14 nanometers.

Furthermore, the firm minimum wage based in Shanghai seems to have mastered chip manufacturing in 7 n. They are used in particular to manufacture MinerVa bitcoin mining machines. Seven nanometers… It’s as good as the American Intel.

It should also be remembered that China controls more than 90% of the refining of rare earths, which are crucial in high technology. An F-35 fighter jet needs 417 kg of materials containing rare earths. In other words, each is held by the goatee.

All of this means more penalties and disruptions to potentially vital long-term supply chains. If you thought the war with Russia was inflationary, the semiconductor shortage will be even worse.

Especially if China decides in retaliation to invade Taiwan…

Unfortunately, everything points to more inflation, which sooner or later will do bitcoin’s business.

“All Roads Lead to Bitcoin”as aptly stated by Greg Foss at the Bitcoin Amsterdam conference.

Glassnode Weekly On-Chain Review Summary

Much of this week’s analysis was based on the Futures market. Let us simply note that the trading volumes on this market are quite low (24 billion dollars per day all the same).

We are back to levels last seen in December 2020, just before the last bull cycle that took us up to $67,000:

Bitcoin: Future volumes

Glassnodeanticipates future volatility, with potentially a « breakout ” at stake…

Let’s finish by saying that the bear Nassim Nicholas Taleb closed his shorts. There are unmistakable signs. Bottom is in…

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