We quickly forget that crypto is not essentially tied to US. Especially in this macro-driven environment, where US economic events are watched as closely in crypto as in TradFi.
The US of course does remain the number one market. However, while the Fed continues with its hawkish signaling, thereâs a very different trend emerging elsewhere. The third and fourth largest central banks, have begun injecting more into global liquidy.
Namely, the Peopleâs Bank of China (PBoC) and the Bank of Japan (BoJ). They inject more money into the global liquidity cauldron than the Fed can drain out. Especially with China, the new narrative has been one of a return to its expansive pre-pandemic growth.
China's incredibly strict (and economically devastating) zero-covid policy was abandoned. This is driving the PBoC to inject cash into the economy at unprecedented rates.
Hence, some of this non-US liquidity makes its way into crypto, and this shouldnât be surprising. After all, a key point of is its borderless nature.
We shouldnât forget this by focusing on US macro too narrowly.
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