The US economy has seen a vast inflow of liquidity in the past decade, but none of that money has made its way into the real economy. Will it find its way to Bitcoin instead?
Growing Liquidity Brings Optimism for 2020 Asset Performance
The increased liquidity, however, may have helped to boost Bitcoin (BTC) to its current valuations. And having excess money to boost asset bubbles may continue to support bitcoin.
Gabor Gurbacs, digital asset strategist at Van Eck, noted the discrepancy between growing money supply and a lowered velocity of money.
While M2 money stock doubled (+$8 trillion) since the financial crisis, M2 money velocity (rate at which people spend money) decreased 30%. It appears that newly minted money (QE/stimulus) doesn't really make it's way to the economy/spending. Where is the money? Why print more? pic.twitter.com/pN2svFfQSx
— Gabor Gurbacs (@gaborgurbacs) January 13, 2020
The growing money supply has come from both quantitative easing and special liquidity injections from the US Federal Reserve. According to analysts, the money does not run into the real economy, or spending, and instead goes directly to the finance sector, either to service debt, or to boost asset nominal prices.
The heightened liquidity also translates into a unique investment climate, where money seeks out investment assets. Stock indexes remain near their all-time highs, expecting another good year for US equities. At the same time, this overall optimism may be spilling over into crypto markets.
Bitcoin Inflation to Go Below Fed Interest Rate Levels after Halving
The expanded money supply also revives the narrative of BTC as a store of value, countering the nominal expansion of prices in dollar terms. With the coming halving, Bitcoin will have a lower annualized inflation in comparison to the Fed interest rate:
In May, Bitcoin will be less inflationary than the Fed #Bitcoin #BTC #digitalgold
— Crypto Tips (@straigtothemoon) January 13, 2020
For Bitcoin, so far Van Eck has not managed to build an ETF product and tap the increasing demand for assets. But there are other tools for mainstream investment, including futures and options from the ICE and CME market platforms.
The rise in liquidity in the past decade re-sparks the criticism that the US economy is threatened by asset bubbles. But for now, the heightened activity staves off stagnation and possibly recessions.
The crypto markets have alternative sources of liquidity, including injections of stablecoins such as Tether (USDT). International fund inflows, especially from Asia, remain highly active. But the overall optimism on the US markets may help boost the general mood.
#BTC jumped more that 10% since #IranvsUSA conflict. But conflict is not the only cause. @Tether_to pumped 500mn tokens into market yesterday to give necessary push to the story. Reversal is imminent if tether pulls out it’s liquidity support.
— Vulture's Pick (@VulturesPick) January 8, 2020
For bitcoin, short-term liquidity is also important, as markets reawaken on sudden news, adding liquidity and positions very fast.
Bitcoin traded at $8,502.39 on Tuesday, after a spike in activity that liquidated short positions. The rally happened just as BTC threatened to slip under $8,000, but recovered soon afterward, in a usual pattern of going against the bearish positions.
What do you think about the potential of increased liquidity to boost BTC? Share your thoughts in the comments section below!
Images via Shutterstock, Twitter @VulturesPick @straigtothemoon @gaborgurbacs The post appeared first on Bitcoinist.com. origin »
Bitcoin has been seeing fewer short liquidity, levels compared to long liquidity levels
BTC's yearly high is one to break for the bulls to make another go for a new ATH.
Following Bitcoin's The post Bitcoin - Here's why liquidity level at $103K is one to watch appeared first on AMBCrypto.
Bitcoin holdings seem to have stabilized, with notable buying activity seen among prominent addresses
Whales are positioning themselves for a potential rally as liquidity inflows into the cryptThe post Will Bitcoin's liquidity and whale activity drive it past $100,000 again? appeared first on AMBCrypto.
According to the latest on-chain data, liquidity in the cryptocurrency markets has reached an all-time high. Here’s the implication of the rising liquidity on the price of Bitcoin and its future trajectory.
Price outlook of Bitcoin is looking good despite liquidity squeeze.
Bitcoin's key liquidity level is at $65K.
The Federal Reserve's liquidity squeeze is well underway, with net liquidity falThe post Bitcoin climbs higher amid Fed's liquidity drop — Can BTC break above $65K? appeared first on AMBCrypto.
Bitcoin is poised for a potential rally toward $70,000, driven by rising liquidity inflows and favorable macroeconomic shifts. Stablecoin demand and lower bond yields are key factors in this uptrend.
Global liquidity has reached a new all-time high above $95 trillion, approaching $100 trillion. Historical data shows expanding liquidity precedes Bitcoin bull runs, potentially signaling a new price surge.
BTC's current price retracement coincides with a dip in US liquidity.
QCP, an asset trading firm, sees flat funding rates as a great opportunity for bulls.
Bitcoin [BTC] is a liquidity The post Checking Bitcoin’s next move - Can US liquidity offer clues? appeared first on AMBCrypto.
Quick Take Many narratives have been attached to Bitcoin, such as an inflation hedge, but one emerging since covid is a global liquidity indicator or the expansion/contraction of balance sheets.
The post Bitcoin as an indicator for global liquidity, balance sheet growth appeared first on CryptoSlate.
The Bitcoin mining pool Poolin on September 6 announced liquidity problems and subsequently suspended withdrawals, flash trades, and internal transfers from its network.
The post Bitcoin mining pool Poolin in distress following liquidity crisis appeared first on CryptoSlate.
Bitcoin and crypto exchange company Kraken announced today that it has acquired Australia’s longest-running crypto service, Bit Trade. This acquisition will allow Kraken to focus in on Australia with AUD liquidity with support for both institutional and retail customers.
The largest corporate debt issuance of all time happened this week, with $69 billion trading hands. The debt represents companies offering investors high-grade bonds with later maturities to increase liquidity — and might even help boost Bitcoin.
Vaultoro, the first real-time bitcoin/gold exchange, has freshly published a Q1 2020 company roadmap. And the new year will bring many enhancements to the crypto commodities exchange. After a busy 2019 in which Vaultoro revamped their entire platform; for 2020, the team is focused on increasing liquidity.
Recent intervention from the Fed in providing liquidity to the US market has outweighed what was injected into the market during the 2008 financial crisis by some margin. In fact, it can be seen as the biggest intervention in the repo markets in history, something in which Bitcoin is immune.
While it posted a 90 percent gain on the year, Bitcoin didn’t fare too well in the second half of 2019, retracing by 50 percent from $14,000 to as low as $6,400 as a majority of mainstream asset classes posted astronomical gains on the back of central bank liquidity injections into the market.
Towards the end of 2019, Bitcoin's Lightning Network started to gain traction again after noted crypto-exchange Bitfinex added support for Bitcoin's 2nd layer payments protocol. Blockstream's Liquid nThe post Bitcoin's Lightning Network requires liquidity for better performance appeared first on AMBCrypto.
In spite of news that the economy appears stable, the Federal Reserve Bank of New York (Fed) had continued injecting liquidity into the market. The most recent action involved an almost $58 billion repurchase (repo) agreement.
Coinspeaker Open Interest in Bakkt’s Bitcoin Futures Hits Record Highs of $7. 02 MillionThe new Bakkt open interest record shows strong trading activity on the platform and greater liquidity within the Bitcoin futures market in general.
Nexo is one of the most successful crypto lenders on the market and has developed the BCH lending service in collaboration with Bitcoin.com. By making BCH-backed loans available on their platform, it enables BCH holders to take loans against their assets instead of having to sell when needing liquidity. This increases the utility of the […]
Bitcoin price has been trading within a tight trading range over the past week, making a few sharp stop runs in the process to liquidate over-leveraged margin traders. One prominent crypto trader says that the stop runs are due to the complete lack of liquidity near the current Bitcoin price, and that they will continue.
Bitcoin price has been trading within a tight trading range over the past week, making a few sharp stop runs in the process to liquidate over-leveraged margin traders. One prominent crypto trader says that the stop runs are due to the complete lack of liquidity near the current Bitcoin price, and that they will continue.
"One thing that the financial crisis has changed in people's mentality is how important is liquidity. People value liquidity more than in years gone by and the financial crisis really put a spotlight The post Bitcoin is going to be 'Pied Piper' for institutions: Kraken exec appeared first on AMBCrypto.
On Wednesday, November 27, the U. S. Federal Reserve pumped $108 billion into the American economy using overnight repo tactics and 15-day repos. The central bank explained the move will stimulate more liquidity into the faltering U.
A regional lender has become the latest victim of the growing liquidity crunch in the world’s most populous country. Yingkou Coastal Bank, operating in the northeastern Chinese province of Liaoning, is the second institution within less than a month to see its financial stability threatened by frightened savers.
After the brutal last week that extended to the first half of Monday, Bitcoin price is now staying above $7,000 level. Meanwhile, Bitcoin liquidity, the degree to which an asset can be quickly bought or sold in the market at a price, has evaporated from the market which Gabor Gurbacs, digital asset director at VanEck […]
Ripple’s commitment of $50 million in equity funding to MoneyGram has finally been completed with the second investment of $20 million coming through. The capital will help MoneyGram expand their operations without putting financial pressure on the On-Demand Liquidity service provided by Ripple and MoneyGram.
1Konto, an API service for best price execution through its routing-as-a-service product Teloneum, has announced a new partnership with Seed CX, a bitcoin and digital asset exchange built for institutional investors.
Рынок биткоина стремительно теряет ликвидность при одновременном росте волатильности, поэтому способен быстро развернуться в любую сторону. Такое мнение высказал стратег по цифровым активам компании VanEck Габор Гурбач.
Bitcoin’s spread in bids and offers is the widest it has been in the past three months, according to recent reports. Bitcoin’s order books are drying up as the leading cryptocurrency continues to be in the red.
The partnership will give Tagomi’s institutional clients access to Binance.US trading pairs, including BTC, and furnish Binance.US with more liquidity.
The post Binance.US and Tagomi Partner to Offer Institutional Liquidity and Access appeared first on Bitcoin Magazine.
Danny Kim is Head of Growth at SFOX, a crypto trading platform and prime dealer for whale traders and institutional investors. SFOX is connected to 20+ exchanges and OTC desks to provide a single point of access to the crypto markets.
Bitcoin's chance to become the ultimate fiat replacement widely depends on its liquidity, which while available, is currently unsuitable for micro-transactions due to constraints including time and trThe post Kraken OTC's 8 out of 10 trades are in Bitcoin: Nelson Minier appeared first on AMBCrypto.
For decades, active traders who were looking to translate massive volatility into substantial profits firmly positioned themselves within the forex markets due to the liquidity and volatility of fiat currencies.
The crypto market first began with the advent of Bitcoin, but in just a decade’s time, thousands upon thousands of alternative crypto assets have been created. Many of these new-age altcoins have performed well for early investors, but the vast majority of crypto assets outside of the top 40 by market cap have little to.
Bitcoin has been going through tough times after its market price was recorded to be around $8,720, at press time. However, the largest cryptocurrency's liquidity has not taken a hit on BitMEX exchangThe post Bitcoin: BitMEX emerges as most liquid among perpetual contract exchanges appeared first on AMBCrypto.
Bitcoin bulls are constantly exhausting the US dollar reserve pool for opening leveraged Long positions, revealed Jesse Powell of Kraken – a US-based cryptocurrency exchange. The chief executive officer told Youtuber Ivan on Tech in an interview that the number of traders who believe that the bitcoin price would go higher is more than those.
CoinDeal, the bitcoin and cryptocurrency exchange, which expanded its operation throughout the U. S. this past summer, has announced the launch of a new OTC service. Over-the-counter (OTC) transactions are executed between a user and an external liquidity provider via Coindeal.
There are many benchmarks for measuring IEO success. Token price, community size, code shipped, and milestones met are all yardsticks for gauging the progress of a tokenized project. For projects seeking to create the biggest possible splash, however, liquidity is the crucial factor.
RippleNet, the network of financial institutions and payment providers using the Ripple ledger, has hit a milestone of 300 institutional customers from 45 different countries. On top of that, On-Demand Liquidity (ODL), which uses XRP to eradicate pre-funding capital requirements, has seen 7x growth from the end of Q1 2019 to the start of Q4,Read MoreRead More.
RealT, a real estate tokenization platform based in the United States, has announced that one of their properties, 9943 Marlowe St in Detroit, is being listed on Uniswap to gradually roll out their vision of bringing liquidity to the real estate market.
According to a report by CNBC, the Federal Reserve is significantly increasing the amount of temporary liquidity that it is providing the financial markets. Currently, it is providing $75 billion for repo operations, but this will increase to $120 billion this week.
There were two proposals drafted on GitHub: LIP-0002 Extension Block and LIP-0003 MimbleWimble for establishing privacy features for the network, a technique originally designed for Bitcoin. The proThe post Charlie Lee lauds Litecoin's liquidity, positive about MimbleWimble soft fork appeared first on AMBCrypto.
After a period of absence, RT’s Max Keiser is back and his commentary on the current state of the global economy is as colorful as ever. The bitcoin bull also had some interesting things to say about China’s gold hoards and its new central bank-backed cryptocurrency.
Many cryptocurrencies have an insufficient number of buyers, and therefore rapidly fall into a frozen state that is very hard to reverse. In this context, bitcoin floats to the top.
The post Cartoon: The Challenges of Liquidity appeared first on Bitcoin Magazine.
While Bitcoin’s ability to dominate the financial system has been supported by the masses, the factors that will eventually speed up the shift towards Bitcoin adoption remain a mystery. Discussing this in detail, OpenNode and Tantra Labs’ Research Strategist, Nik Bhatia, featured on What Bitcoin Did podcast, to support Bitcoin as an answer against centralised […]
The post Bitcoin’s liquidity makes it similar to gold: OpenNode’s Nik Bhatia appeared first on AMBCrypto.
Bitcoin does not have a wealth distribution problem after all, another expert has said as the debate continues to mushroom within the industry. BTC Ownership ‘Seems Balanced’ In a tweet August 15, Gabor Gurbacs, digital asset strategist and director at investment management giant VanEck, took claims the Bitcoin supply was centralized to task.
