Winter is Coming for Bitcoin: Dragons and Inflation

A Crypto Storm is Brewing

Hark my loyal subjects! Your Khaleesi Daenerys Stormborn of the House Targaryen First of Her Name Queen of Meereen Queen of the Andals and the Rhoynar and the First Men Lady Regent and Protector of the Realm Breaker of Chains and Mother of Dragons brings tidings from a realm far removed from Westeros yet equally fraught with peril: the realm of Bitcoin! It appears the digital dragons have taken a tumble falling to levels unseen since May. Unlike my scaly children who breathe fire and brimstone Bitcoin seems to be breathing… well not much of anything good lately.

The Iron Price of Oil

The whispers from across the Narrow Sea speak of rising tensions in the Middle East a land where sand replaces snow and oil replaces dragonfire. This unrest coupled with renewed fears of inflation – a beast more insidious than even the most cunning Lannister – has triggered a selloff. They say Iran threatens to block the Strait of Hormuz a vital passage for oil. If that happens JPMorgan warns the price of oil could soar higher than Drogon on a windy day! Such economic upheaval could send inflation back to levels unseen since… well a time before I was busy conquering cities and freeing slaves. Those were simpler times eh?

The Bitcoin Nasdaq Alliance?

Bitcoin often touted as a hedge against inflation – a shield against economic dragons if you will – is instead behaving like a fickle courtier aligning itself with the tech heavy Nasdaq. Kaiko claims their correlation has risen sharply which means when tech stocks sneeze Bitcoin catches the plague. It's as if Bitcoin has forgotten its true allegiance forsaking its dragon blood for the whims of lesser houses. Such a betrayal! 'Dracarys!'… I mean maybe not. We'll see how this plays out.

Where did the Dragons go?

Institutional investors those who control vast fortunes like the Iron Bank of Braavos initially poured gold into Bitcoin ETFs. But their enthusiasm waned quicker than a Dothraki charge against a well fortified castle. The money flowed in like the Rhoyne in flood. Until suddenly...it trickled to a halt. A mere $6.4 million on Friday! It appears even the wealthiest houses are wary of the storm clouds gathering on the horizon.

Forced Selling Like a Wildfire

The technical breakdown further ignited the flames like a wildfire consuming King's Landing (though hopefully with fewer innocent casualties). Bitcoin's fall triggered forced selling on platforms like Binance and Bybit. Apparently falling below $99,000 caused a domino effect liquidating over $1 billion in crypto positions. 'When you play the game of thrones you win or you die.' Or in this case you lose a lot of digital gold.

A Queen's Decree

So what is to be done? As your Queen I urge caution. Heed the signs fortify your positions and remember: a true ruler must be adaptable. Winter is coming both in Westeros and the Bitcoin market. But just as I faced the Night King we shall face these challenges with courage and… perhaps a little strategic reallocation of assets. Now if you’ll excuse me I need to go consult with Tyrion. He's surprisingly good with numbers even if he does drink too much wine.