First Mover: Bitcoin Investors the Sane Ones as Federal Reserve Cheers Inflation, Price Nears $11K

Sep 15, 2020 at 12:56 UTCUpdated Sep 15, 2020 at 14:21 UTC.Crypto investors inverting the gold-price scale is starting to seem like the sane thing to do.

Every time the stock market goes up, it just validates the reality that the dollar is being debased by trillions of dollars of central bank money printing.

In a monthly letter, Morehead was discussing how central banks typically succeed when they pointedly attempt to increase inflation, as the Federal Reserve is now pursuing as an official policy.

The Federal Reserve's top monetary officials meet this week to discuss their next steps for healing the U.S. economy, which at this point appears to consist of doing nothing for the next several years until inflation rises above the central bank's historic 2% target and stays above that level for a while.

As reported by First Mover Monday, it's possible the Fed's next move would come if the stock market takes a fresh dive, prompting the central bank to step in and pump more money into the economy to keep markets functioning smoothly.

What tips the scales toward the crypto investors being the sane ones and not the other way around is that market signals are currently validating the crypto investment thesis.

Bill Gross, the legendary former Pimco bond fund manager, is encouraging investors to get defensive because "There is little money to be made almost anywhere in the world," CNBC reported Monday.

Morehead said bitcoin and other cryptocurrencies are winning because they have a relatively fixed supply, similar to gold, and "Improved usage/fundamentals," similar to tech stocks like Amazon and Netflix.

One includes crypto, and goes up to 244%; the other doesn't include crypto, and it goes up to 29%. So far this year, based on the track record so far anyway, it turns out the smart money was in crypto.

Bitcoin looks north, having breached a 10-day-long sideways trend with a move above $10,500 on Monday.