Global liquidity growth promises a massive market surge
Global liquidity is soaring as central banks are injecting capital into economies worldwide. This increase has far-reaching implications for #investors!
Assets such as stocks and #Cryptocurrencies are rising in value, and those with investments can expect gains. On the other hand, savers are suffering. The value of their cash is declining as excess liquidity erodes its true worth.
A giant #bullmarket is coming, with $BTC Bitcoin leading the charge
This wave of liquidity is paving the way for a massive bull run, and Bitcoin could be one of the key players. Historically, BTC has shown a strong correlation with global liquidity growth.
As liquidity rises, #bitcoinâïž tends to follow suit. When liquidity contracts, its price declines. This has earned Bitcoin the nickname âthe #liquidity barometer.â
Central banks as the driving force of the market
Money printers are running at full speed, with the U.S. Federal Reserve playing a key role in this process. Although their indicators are mixed, one thing is clear â the flow of liquidity is increasing. Banks are drawing more funds than they have, indicating that their reserves are tight.
While this may be a warning sign of stress building in the system, the Fed does not yet see the situation as critical. Another important indicator is the Reverse Repo Facility, where large institutions park money they do not want to risk on the volatile market.
At the end of the third quarter, $2.5 trillion flowed into this facility, the highest level since June. This move suggests that major players are nervous and prefer to keep their funds in safer places.
Expected Fed interest rate policy
Federal Reserve Chair Jerome Powell hinted that the remaining interest rate cuts this year will be milder than the previous 50 basis point reduction. The Fed has meetings scheduled in November and December, where further cuts could be discussed.
Powell emphasized that the final decision will depend on the upcoming economic data, including reports on employment. He also pointed to new revisions of the national income and product accounts, which show that the U.S. economy is stronger than originally expected.
If the economy performs as forecasted, the Fed could make two more rate cuts this year, bringing an additional 50 basis point reduction overall.
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.â
