Capital migrates to where it flows with the least resistance, i.e. to forms of capital that are liquid and offer low transaction costs—what I call ease of flow. Capital also migrates to relatively safe havens that are liquid and offer low transaction/holding costs, and to forms of capital with global utility. And it also flows to the highest yield/return with the lowest perceived risk.
Given these fundamentals, it isn’t difficult to understand why capital is flowing into USD-denominated assets and bitcoin.
So what do the fundamentals suggest about the valuation uptrends in the USD and bitcoin? Have they topped out and due for a crash, or have they just started their appreciation cycle?