•Bitcoin valuation is largely a function of both the real yield and expected inflation.•Fed assets in relation to real gdp drive the real yield.•Money supply in excess of real gdp drives inflation.•Bitcoin, like gold, faces twin headwinds if the fed sticks with announced policy and...

Central banks hold gold reserves that are designed to build confidence in fiat currency. This confidence is undermined if the price of gold falls significantly or rises significantly. Central banks thus have an incentive to manage the price of gold. Such management is evident in fixed gold...