Has Global Liquidity Reached an All-Time High? Is Bitcoin Next?
The world’s liquidity has crossed an astonishing milestone of $95 trillion, and it is fast approaching the $100 trillion mark. For such a period where historically, Bitcoin has thrived in such events, this could mean big things for Bitcoin.
What is Global Liquidity?
Global liquidity means the total amount of money that is moving around in the global financial system. It includes M2 money supply from major economies like the USA, China, EU, and Japan. M2 includes:
- Cash
- Bank Deposits
- Money Market Mutual Funds
- Other Near-Money Assets
Past Correlation With Bitcoin Bull Runs
Expanding Liquidity and Performance of Bitcoin
Expanded liquidity has traditionally preceded bullish runs in Bitcoin prices. Here’s why:
- Central banks tend to lower interest rates and carry out quantitative easing more often when there is increased currency creation.
- This encourages spending on riskier assets like Bitcoin.
Previous Bull Runs
- March 2021: At $95 trillion, global liquidity saw BTC hit all-time highs of $73k.
- November 2021: At $90 trillion, global liquidity saw BTC peak at $69k.
Current Trends And Future Predictions
Present Scenario
After dipping below USD 60,000 briefly before bouncing back to around USD 64,500 recently, with worldwide liquidity hitting new heights – once again, does Bitcoin seem ready for another potential bull run?
Supply Cap Of Bitcoin
Due to its fixed supply schedule, some investors view Bitcoin as an alternative to traditional financial systems, which makes it attractive especially during periods characterized by increasing worldwide monetary abundance.
Conclusion
As we continue witnessing an increase in global liquidity surpassing the $95 trillion threshold, maybe BTC should also get ready for another serious price surge. Keep abreast and consider including Bitcoin in your investment strategy.