Global liquidity is on the rise once again, and it seems that no asset correlates more closely with fluctuations in global liquidity than Bitcoin.
With interest rates dropping and quantitative easing back in play, global liquidity (M2) is increasing. Historically, the crypto market, particularly Bitcoin, has shown a strong sensitivity to changes in liquidity. The last bull run coincided with the U.S. distributing "helicopter money" and a significant surge in liquidity to mitigate the impacts of the COVID-19 crisis.
Recent research has highlighted that Bitcoin exhibits the highest correlation with changes in global liquidity, often referred to as directional alignment. This suggests that if the current trend of increasing liquidity continues, we can expect positive effects on Bitcoin and the broader crypto market.
What are your thoughts on this potential impact?
