The Bitcoin market has witnessed a massive shakeout of leveraged traders in the past 24 hours, as the price of the leading cryptocurrency surged to a new all-time high above $69,000. According to data from Bybt, a crypto derivatives analytics platform, more than $69 million worth of Bitcoin shorts were liquidated in the last day, with the majority of them occurring in the span of a few hours.

What caused this short squeeze? There are several factors that contributed to the bullish momentum of Bitcoin, including:

The anticipation of the first Bitcoin futures exchange-traded fund (ETF) in the US, which is expected to launch this week. The ETF, sponsored by ProShares, will track the performance of Bitcoin futures contracts on the Chicago Mercantile Exchange (CME), and will provide a more accessible and regulated way for investors to gain exposure to Bitcoin.

The positive sentiment from institutional investors and corporations, who have been increasing their adoption and endorsement of Bitcoin as a store of value and a hedge against inflation. For example, PayPal announced that it will allow its users in the UK to buy, sell and hold Bitcoin and other cryptocurrencies on its platform, following its launch in the US last year.

Moreover, EX Twitter founder Jack Dorsey revealed that his other company, Square, is building a Bitcoin-focused decentralized exchange, which will enable users to swap fiat and crypto assets without intermediaries.

The technical strength of the Bitcoin chart, which showed a clear breakout of the previous resistance level at $67,000, and a confirmation of the uptrend with higher highs and higher lows. The next major target for Bitcoin bulls is the psychological level of $70,000, which could trigger more FOMO (fear of missing out) buying and further liquidations of short positions.

How to trade Bitcoin in this volatile market? While the current rally of Bitcoin is impressive and exciting, it also comes with high risks and challenges for traders who want to capitalize on the price movements. Here are some tips and strategies to consider:

Use proper risk management. Trading with leverage can amplify your profits, but also your losses. Therefore, it is crucial to use stop-loss orders, limit orders, and take-profit orders to protect your capital and lock in your gains. You should also avoid risking more than you can afford to lose and diversify your portfolio with other assets and markets.

Follow the trend. The trend is your friend, until it ends. Right now, the trend of Bitcoin is clearly bullish, so it makes sense to look for long opportunities rather than short ones. You can use trend indicators, such as moving averages, trend lines, and chart patterns, to identify the direction and strength of the trend, and trade accordingly.

Be flexible and adaptable. The crypto market is dynamic and unpredictable, so you need to be ready to adjust your strategy and tactics according to the changing conditions. You should also keep an eye on the news and events that could impact the price of Bitcoin, such as regulatory developments, network upgrades, security breaches, etc. By staying informed and alert, you can avoid potential pitfalls and take advantage of emerging opportunities.

Bitcoin, the world’s most popular cryptocurrency, has been on a tear lately, reaching new highs and attracting more investors. But while some see it as a hedge against inflation, others warn that it may actually contribute to it.

How can Bitcoin affect inflation? The answer lies in the relationship between money supply, demand, and prices. Inflation is the general increase in the prices of goods and services over time, which reduces the purchasing power of money. It is usually caused by an excess of money supply over the demand for money, which means that there is more money chasing fewer goods.

Bitcoin, unlike fiat currencies, has a fixed supply of 21 million coins that can ever be created. This means that it cannot be inflated by printing more money, as central banks do. However, it can still affect the demand for money and the prices of goods and services in two ways.

First, Bitcoin can increase the demand for money by reducing its velocity. Velocity is the rate at which money circulates in the economy, or how often it changes hands. The higher the velocity, the more transactions are made with the same amount of money, and the lower the demand for money. The lower the velocity, the fewer transactions are made with the same amount of money, and the higher the demand for money.

Bitcoin has a low velocity because it is mostly used as a store of value rather than a medium of exchange. Many people buy Bitcoin and hold it for long periods of time, hoping that its price will appreciate. This reduces the amount of money available for spending on goods and services, which increases the demand for money and puts upward pressure on prices.

Second, Bitcoin can affect the prices of goods and services by influencing their relative value. Relative value is the ratio of the price of one good or service to another, or how much of one good or service can be exchanged for another. For example, if one Bitcoin can buy 10 pizzas today, but 20 pizzas tomorrow, then the relative value of Bitcoin has increased and the relative value of pizzas has decreased.

Bitcoin can influence relative value by changing its own price in relation to other currencies and goods and services. As Bitcoin’s price rises, it becomes more valuable compared to other currencies and goods and services. This means that people who own Bitcoin can buy more things with it, which increases their demand for those things and drives up their prices.

Conversely, as Bitcoin’s price falls, it becomes less valuable compared to other currencies and goods and services. This means that people who own Bitcoin can buy less things with it, which decreases their demand for those things and drives down their prices.

Therefore, Bitcoin’s price rally may add to inflation by increasing the demand for money and affecting the relative value of goods and services. However, this effect may not be significant or lasting, as there are many other factors that influence inflation, such as economic growth, productivity, fiscal policy, monetary policy, expectations, and shocks. Moreover, Bitcoin’s price is highly volatile and unpredictable, which makes it difficult to measure its impact on inflation.

Bitcoin’s price rally may add to inflation by increasing the demand for money and affecting the relative value of goods and services. However, this effect may not be significant or lasting, as there are many other factors that influence inflation. Bitcoin’s price is highly volatile and unpredictable, which makes it difficult to measure its impact on inflation.

Former Nigerian President Olusegun Obasanjo has weighed in on Nigeria’s ongoing inflation crisis, proposing that the country seek guidance from Zimbabwe, which has successfully navigated similar economic challenges in the past.

Addressing a youth leadership symposium at the Olusegun Obasanjo Presidential Library in Abeokuta, Obasanjo underscored the importance of learning from the experiences of others to overcome the current economic predicament.

Nigeria, according to the latest data from the National Bureau of Statistics, is grappling with an alarming inflation rate of 29.9 percent. The sharp rise in living costs has triggered protests across the nation, particularly as essential food items become increasingly unaffordable for many Nigerians.

The symposium, themed “Opportunities for Peace: Roles of the Youths in Conflict Prevention in Africa,” was organized by the Centre for Human Security and Dialogue in collaboration with the Institute for African Culture and International Understanding. The event provided a platform for discussions on the role of youth in promoting peace and stability in Africa.

During his address, Obasanjo emphasized the need for resilience in confronting challenges, stating, “When the time is rough and tough, the tough must get going… no problem is new and no problem will be permanent.”

He urged Nigerians not to succumb to despair but to confront the inflation crisis head-on, drawing inspiration from the experiences of other nations that have overcome similar economic hardships.

Drawing parallels with Zimbabwe’s economic trajectory, Obasanjo highlighted the southern African nation’s struggle with hyperinflation in recent decades.

“We have this problem of galloping inflation in the country now but do we have a country with such problems recently? Yes we do, Zimbabwe had this problem recently. Shouldn’t we ask them how they did it even if our approach will be different? Even if whatever we shall be doing will be different but we can ask questions to navigate our way out,” he said.

Zimbabwe’s official inflation rate averaged a staggering 43 percent from 2009 to 2023, reaching a peak of 786 percent in May 2020. The crisis had its roots in the 90s, with inflation skyrocketing to an unprecedented 79.6 million percent in November 2008.

To address the inflation crisis, Zimbabwe implemented a series of reforms aimed at stabilizing prices, and exchange rates, and restoring confidence in the currency. Key measures included adopting foreign currencies as official tender, effectively halting the printing of Zimbabwean dollars, and allowing the use of foreign currencies, predominantly the U.S. dollar, for transactions. These interventions played a crucial role in rebuilding consumer trust in the stability of the currency.

Despite facing setbacks and a resurgence in inflation, peaking at nearly 557 percent in late 2020, Zimbabwe has managed to rein in inflation to a more manageable double-digit yearly rate. As of February 2024, Zimbabwe’s annual inflation stood at 47.6 percent, the highest in over a year, reflecting ongoing economic challenges but also demonstrating a degree of stabilization compared to previous years.

Obasanjo’s recommendation to seek guidance from Zimbabwe is rooted in his reputation as a leader who oversaw significant economic growth during his presidency. Described as the “most successful” period in terms of economic performance, job creation, and inflation control, Obasanjo’s administration witnessed substantial GDP growth from 2.58 percent in May 1999 to 6.06 percent in May 2007. During this period, inflation rates dropped from 11.91 percent to 8.55 percent, although there was a slight increase in unemployment from 10 percent to 12.30 percent.

In light of Obasanjo’s remarks, Nigerian policymakers may consider exploring Zimbabwe’s economic strategies as potential solutions to address the current inflationary pressures. By drawing lessons from Zimbabwe’s experiences, Nigeria could chart a course toward economic stability and prosperity, ensuring the well-being of its citizens and fostering sustainable development.

The Nigerian government’s efforts to address inflation have been ongoing. Policymakers have been implementing various measures to mitigate the impact of inflation on the economy. The Central Bank of Nigeria (CBN) has been actively involved in monetary policy adjustments to stabilize prices and support economic growth.

In recent months, the CBN has adjusted key interest rates and implemented liquidity management measures to manage inflationary pressures. Additionally, the government has initiated programs to boost agricultural productivity and food security, aiming to alleviate the burden of rising food prices on consumers.

Despite these efforts, challenges persist, and the call for seeking external guidance, as suggested by Obasanjo, underscores the complexity of addressing Nigeria’s inflation crisis. Economic experts say collaboration with international partners and drawing lessons from other countries’ experiences can provide valuable insights and strategies for navigating the current economic challenges.