{"id":1493566,"date":"2024-10-02T21:00:00","date_gmt":"2024-10-03T01:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1493566"},"modified":"2024-10-02T21:00:00","modified_gmt":"2024-10-03T01:00:00","slug":"unsurprisingly-the-bitcoin-price-follows-global-liquidity","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/unsurprisingly-the-bitcoin-price-follows-global-liquidity\/1493566\/","title":{"rendered":"Unsurprisingly, The Bitcoin Price Follows Global Liquidity"},"content":{"rendered":"

Unsurprisingly, The Bitcoin Price Follows Global Liquidity<\/span><\/p>\n

\n

Authored by Vivek Sun via BitcoinMagazine.com,<\/em><\/a><\/p>\n

I have been intrigued by the significant increase in global liquidity during 2024, driven by extensive money printing and debt expansion, and how it impacts Bitcoin’s price.\u00a0<\/p>\n

Bitcoin is an expression against the government’s monetary expansionist policies, so its price follows global liquidity,<\/strong> as seen here\u00a0on this chart.<\/a><\/p>\n

<\/a><\/p>\n

It was fascinating to read the recent\u00a0report<\/a>\u00a0by\u00a0Lyn Alden<\/a>\u00a0and Sam Callahan analyzing Bitcoin’s correlation to global liquidity.<\/p>\n

This further reconfirmed my view that more monetary expansion drives more people to Bitcoin, increasing prices.\u00a0<\/p>\n

Their rigorous analysis found that over 12-month periods, Bitcoin’s price moves in the same direction as global liquidity a remarkable 83% of the time. <\/strong><\/p>\n

This is higher than any other major asset class, making Bitcoin a uniquely pure barometer for global liquidity trends.<\/p>\n

<\/a><\/p>\n

The report quantified Bitcoin’s correlation with global M2 money supply, finding a very strong 0.94 overall correlation between May 2013 and July 2024. Bitcoin’s average 12-month rolling correlation was 0.51, while stocks and gold showed moderately high correlations as well in the 0.4 to 0.7 range.<\/strong><\/p>\n

Of course, Bitcoin’s correlation isn’t perfect. Shorter-term breakdowns can occur around crypto-specific events like exchange hacks or Ponzi schemes collapsing.<\/p>\n

Supply-demand imbalances also cause temporary decoupling when Bitcoin reaches extreme overvaluation levels during market cycle peaks.<\/strong><\/p>\n

Yet despite these breakdowns, the long-term relationship persists.\u00a0<\/p>\n

Right now, liquidity is soaring to unprecedented levels, suggesting Bitcoin could soon embark on a massive bull run if this relationship holds. <\/strong><\/p>\n

While I believe no model perfectly captures Bitcoin’s complexity, recognizing its role as a monetary canary in the coal mine can lend valuable insight.<\/p>\n

If history rhymes, Bitcoin’s sirens are ringing loudly that a liquidity-driven boom will soon be underway.\u00a0<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 10\/02\/2024 – 17:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/crypto\/unsurprisingly-bitcoin-price-follows-global-liquidity<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Unsurprisingly, The Bitcoin Price Follows Global Liquidity Authored by Vivek Sun via BitcoinMagazine.com, I have been intrigued by the significant increase in global liquidity during…<\/p>\n","protected":false},"author":0,"featured_media":1493567,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1493566","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1493566","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1493566"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1493566\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1493567"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1493566"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1493566"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1493566"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}