The Invisible Hand

Follow the money. On a higher timeframe, the bull market is most likely over. Why? Possibly inflation . Or possibly something else entirely . When whales and industrialists have higher material costs, they have less money to store in crypto. Right?

Human beings struggle to understand how macro things work, which is why we need mathematical models to help us detect what is invisible to us. There are lots of rich people in the world right now worried about the future.

Anchoring Inflation

Recently, Warren Buffet said,"We are raising prices. People are raising prices to us, and it's being accepted."

That means that inflation expectations are not anchored by the Federal Reserve . Warren Buffet is a very midwestern American, so by coming out and saying this he was basically disagreeing tactfully in public with Federal Chair Jerome Powell, who preaches that things are still calm.

What does "anchoring expectations" mean? In 2007, American economist Ben Bernanke wrote: "The anchoring of inflation expectations is a necessary condition for central banks to maintain price stability, as it prevents temporary shocks to inflation from feeding into the mechanisms of wage and price formation."

The Velocity of Money ( M2V )


During inflationary times, the velocity of money increases. This means that money changes hands quicker because people do not want to HODL money. Cash does not pay yield, dividends or rent, so low-velocity cash (HODLing) endangers a human being's economic survival during inflation . If Ethereum is money, then it's possible that this concept of velocity might apply to Ethereum as well. We just don't know. I personally think it does because DeFi or Yield Farming just isn't big enough yet.