Falling wood prices, inflation and its impact on Bitcoin as digital gold

Since Black Thursday 2020, few asset classes have gone crazy as much as commodities like wood, alongside Bitcoin and cryptocurrencies on a total ROI basis. The increase in inventory-limited assets is linked to post-pandemic inflation and continued supply shortages due to closures. However, both wood futures and cryptocurrencies have seen significant declines since the last Fed meeting in 2023, when they only talked about aggressively raising interest rates. Here's what this could mean in terms of inflation and Bitcoin as a digital gold story. Bitcoinist Macro Report: Who Says Money Doesn't Grow on Trees? When COVID first hit in the first quarter of 2020, it scrambled the markets and asset prices are now several times higher than then, as a result of the excessive stimulus money that has flooded the economy since then. The supply shortage continues, with quarantine conditions and widespread unemployment affecting homes, consumer prices, cryptocurrencies, stocks and even the prices of commodities such as wood. Related literature | Low Volatility Bitcoin Suggests “Still at Mass” The situation has resulted in a parabolic market in both Bitcoin and Wood. But those markets have since reversed and sentiment worsened when the Fed started talking about raising interest rates. The Bitcoin digital gold story was fueled by the idea that the ultra-scarce cryptocurrency would be the fastest horse in the race against inflation. FOMO did the rest, pushing prices above $65,000 per coin. With Bitcoin and Wood currently trading at around 50% of their peaks, is this a sign that inflation fears have been exaggerated? Bitcoin and Wood Futures Follow a Similar Path | Source: BTCUSD on TradingView.com Will falling wood hurt the digital gold story? With trillions added to the total money supply in the past year alone, fears of inflation are mounting. Consumer prices are rising at the same time, and only time will tell if F increases.

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