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Bitcoin Faces The Liquidity Steamroller Of Global Markets

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The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Liquidity Is In The Driver Seat

By far, one of the most important factors in any market is liquidity — which can be defined in many different ways. In this piece, we cover some ways to think about global liquidity and how it impacts bitcoin.

One high-level view of liquidity is that of central banks’ balance sheets. As central banks have become the marginal buyer of their own sovereign debts, mortgage-backed securities and other financial instruments, this has supplied the market with more liquidity to buy assets further up the risk curve. A seller of government bonds is a buyer of a different asset. When the system has more reserves, money, capital, etc. (however one wants to describe it), they have to go somewhere.

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