Philip Swift, the founder of LookIntoBitcoin, has recently identified significant shifts in global liquidity, underscoring their profound effects on cryptocurrency prices and other asset classes. The increasing liquidity worldwide paints a promising scenario for investors, suggesting a positive outlook for the markets.
Global Liquidity and Bitcoin
Bitcoin‘s price has managed to stay above $71,000, a surge supported by the rising global liquidity levels. Swift’s latest analysis emphasizes this trend, noting that the global liquidity has neared the $100 trillion mark. This increase offers greater potential for risk markets to rise. By examining the world’s M2 money supply and its correlation with Bitcoin’s price movements, Swift highlights a strong connection between the two.
Currently, the M2 money supply in US dollars stands at $94 trillion. When Bitcoin hit its previous all-time high in 2021, the supply was at $91 trillion. The supply dropped to $85 trillion during late 2022, coinciding with the bottom of bear markets. Since then, it has risen by 10%, paralleling faster growth in cryptocurrencies. This upward trend in M2 supply continues to date.
What Does the Future Hold for Cryptocurrencies?
Swift asserts that monitoring the liquidity supply is crucial in the current bull run. He expresses optimism as the liquidity chart reaches an all-time high, signaling a potentially strong medium and long-term future for cryptocurrencies. In his latest analysis, he posed a thought-provoking question: “The most important chart for this bull run has reached an all-time high. Are you ready?”
Key Insights for Investors
CryptoQuant’s recent market report aligns with Swift’s analysis, noting significant investments by major players. Key insights for investors include:
- Major investors have injected about $1 billion into Bitcoin, mirroring the 2020 trend.
- Despite low price volatility, on-chain activity remains high, indicating strong market interest.
- Institutional investors are likely purchasing Bitcoin, contributing to the increase in custodial wallets.
These points highlight the substantial institutional interest and potential for continued growth in the cryptocurrency market, driven by the rising global liquidity.
In conclusion, the ongoing rise in global liquidity presents a favorable environment for the growth of cryptocurrencies. Monitoring these liquidity trends is crucial for investors aiming to capitalize on the market conditions.