Global Liquidity Surpasses $100 Trillion...Next Bitcoin (BTC) Bull Market?

▲ Dollar (USD), Bitcoin (BTC)

As global liquidity surpassed $103 trillion, reaching an all-time high, expectations for additional capital inflow into Bitcoin are rising.

According to crypto media outlet Benzinga on September 28 (local time), market research platform Bull Theory analyzed that major central banks' continuous monetary expansion policies would facilitate capital inflow into risky assets such as stocks, gold, and Bitcoin (BTC). The combined money supply of the four major economic blocs—the Federal Reserve (Fed), the European Central Bank (ECB), the Bank of Japan (BOJ), and the People's Bank of China (PBOC)—recorded an all-time high of $103.66 trillion. The broad money (M2) of these four central banks increased by more than $1 trillion in August alone and by approximately $5.6 trillion since the beginning of this year.

Bull Theory emphasized, "The more money that is printed, the more capital will inevitably flow into assets like stocks, gold, and Bitcoin." The view that liquidity expansion is a key driver for Bitcoin's rise has consistently gained support among major industry experts. Anthony Pompliano, CEO of ProCap Financial Inc. (BRR), and Arthur Hayes, CIO of Maelstrom Fund, have argued that the long-term growth of virtual assets is directly linked to the increase in fiat currency liquidity.

However, it is also pointed out that the traditional liquidity correlation has somewhat weakened in the recent market. According to data compiled by virtual asset analytics platform CoinGlass, while Bitcoin has benefited from the increase in global money supply, it has shown signs of decoupling in the recent bear market, experiencing price corrections even amidst increasing liquidity. Matthew Sigel, Head of Digital Asset Research at VanEck, noted that there might be a time lag between liquidity supply and Bitcoin price appreciation. As the money supply from the four major central banks has been increasing for 10 consecutive months, it is expected that the buying capital that will flow into the market with a time lag will be the key to future rallies.

[Article Key Summary]

-The combined M2 money supply of the four major central banks recorded an all-time high of $103.66 trillion.

-Bull Theory predicted that continued monetary expansion would lead to massive capital inflows into scarce assets such as Bitcoin and gold.

-Despite the pointed-out time lag between liquidity indicators and price, accumulated liquidity is expected to act as a driving force for future rebound.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*