The Base, Bull And Bear Cases For Bitcoin Returns – Bitcoin Magazine

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Darius Dale is the Founder and CEO of 42 Macro, an investment research firm that aims to disrupt the financial services industry by democratizing institutional-grade macro risk management processes.

Key Takeaways

The distribution of probable economic outcomes — and by extension, financial market outcomes — is as flat and wide as it has been in recent years. 42 Macro’s base-case scenario of deflation calls for an expected return of -10% annualized for bitcoin. Our bull case scenario of deflation plus policy rate decreases calls for an expected return of +29% annualized for bitcoin. Our bear case deflation plus quantitative tightening calls for an expected return of -37% annualized for bitcoin. Critically, all three scenarios are equally probable over the next three to six months. If we sounded highly convinced issuing sell warnings at every lower high in bitcoin’s price from early-December through July, we should sound equally unconvinced today.

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