All about macro and more (part 4)

▶️ #thoughts

🤝We continue our series of educational posts on macro. Today we will analyze the global liquidity index (GL) and how it affects the crypto market.

▫️What is global liquidity (GL) and its types

• This is the total amount of money available in the global economy;

• Market liquidity is the ability to buy or sell an asset;

• Financial liquidity (FL) is money moving through global financial markets, it is important that this is not money in the real economy, this is money in financial markets.

▫️What GL consists of

• The two largest world banks that have the largest contribution to global liquidity are the FED (more details about the Fed in the first part) and the PBoC (People's bank of China);

• Other banks also play an important role, but are not a decisive factor.

▫️How GL affects crypto

• When central banks print more money or lower interest rates, global liquidity increases;

• This means people have more money to invest in various assets, including crypto;

• And of course, there can be a reverse effect when policies tighten and the amount of money in circulation decreases.

👾Result

• Global liquidity is the main driver of growth of financial assets, including crypto;

• GL is cyclical, each cycle lasts on average 5-6 years, for example, the market bottom of this cycle occurred in October 2022, and a possible peak is expected at the end of 2025;

• This index can be found on TradingView in the "Global Liquidity Index" indicators.

Throw in a 🔥 if you want the continuation of the rubric.

😎DOUBLETOP — more than crypto