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The Ever-Growing Bitcoin Black Hole

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1. Bitcoin is the world’s best monetary good designed to go up forever
2. Market participants buy and the price goes up
3. Price going up attracts more buyers (with leverage)
4. Leverage buyers drive up the contango spread
5. USD arbitrageurs attempt to capture the risk-free return
6. To capture the spread, they buy bitcoin and sell futures
7. Buying bitcoin causes the price to go up further
8. Price going up increases the contango spread, attracting more arbitrageurs
9. Investor recognize this feedback loop exists and just buy bitcoin to HODL
10. Repeat for all market participants until hyperbitcoinization?

[https://bitcoinmagazine.com/markets/a-deep-dive-into-bitcoins-contango](https://bitcoinmagazine.com/markets/a-deep-dive-into-bitcoins-contango)



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4 Comments

  1. Great staged model for ordinary stocks from past!
    It’s as simple as this i see from a small, i mean really small HODLer from the UK.
    China have thrown a spanner in the USD dominance throughout the world with their Yuan and relentless BTC mining, with news reports like china risk breaking their carbon zero agreement with its power consumption! 😂
    Because China give a flying monkeys fart on emissions if it means owning lion share?

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