In May and June, the logic of spot doubling and Bitcoin reaching 78,000 shows that monetary easing is really coming. Under the pressure of bank failures, the Federal Reserve is preparing to do another small monetary easing to save the market. How much will Bitcoin increase due to this wave of monetary easing and good news?
It’s funny. Some people say that the reason why large institutions don’t invest in Bitcoin is that it is a product of high risk and volatility. However, in the past two years, the volatility of Bitcoin has been lower than that of Netflix. So is there any problem with institutions increasing their holdings of Bitcoin now?
In May, the Federal Reserve decided to reduce the pace of balance sheet reduction from $95 billion per month to $60 billion, which is equivalent to adding $35 billion in liquidity per month. At the same time, the latest quarterly report on borrowing new and repaying old debts revealed that in order to meet the funding needs before the end of May, short-term Treasury bonds with maturities of 4 weeks, 6 weeks and 8 weeks will be issued in the near future. Bitcoin will be re-injected with US dollar liquidity in May and June, and a new round of gains will be realized in May.
The Federal Reserve has started a small-scale monetary easing at the macro level. At the same time, this round of Bitcoin ETFs has skyrocketed across the board, confirming that the trend has bottomed out. After BlackRock announced that pension funds and other inherent original funds will enter the market, the currently known single-day Bitcoin ETF inflows are as high as 370 million US dollars. The overall market is going crazy.
In addition to the positive news of Bitcoin and the loosening of the overall environment, Ethereum's spot ETF will be coming in May. The approval of Ethereum ETF will bring huge liquidity to the existing L2 track, and the market will be faced with a wave of capital choices.
This round of Bitcoin crash also tells us a very important fact: a large number of funds from traditional Wall Street financial institutions and global investors have flowed into Bitcoin in a compliant manner, injecting unprecedented liquidity into Bitcoin, thereby pushing the price of Bitcoin to a historical high. This may also be the significance of the hype about the upcoming passage of the Bitcoin spot ETF since October 2023. It is also one of the important narratives of the new cycle of Bitcoin, "compliant funds."
So, some people are asking why the interest rate was raised in 2017, but why is Bitcoin still in a bull market? In fact, as the compliance of Bitcoin increases and the certainty of Bitcoin grows, the correlation between Bitcoin and the macro environment becomes more and more important.
Looking back at the history of Bitcoin's four cycles, each bull market cycle narrative requires incremental funds to flow into Bitcoin, and only then will Bitcoin begin its bull market. This round marks the beginning of history, and Bitcoin has officially entered the world's top stage. $BTC #BTC走势分析 #BTC
