Bitcoin Price Surge: Liquidity Boost Fuels 20% Rally?
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Jamie Coutts, Real Vision's chief crypto analyst, posits a strong correlation between global liquidity expansion and Bitcoin's price movements. His proprietary Global Liquidity Index (GLI) shows a new all-time high in April 2024, coinciding with a 40% Bitcoin rally. Coutts suggests that each 1% increase in global liquidity translates to a potential 20% Bitcoin price jump. This prediction is based on his observation of historical data showing a tight relationship between his GLI and Bitcoin prices since 2018. The GLI combines data from G4 central bank balance sheets, broad money aggregates (like M2), and key US liquidity accounts. While the current 2% increase in GLI since April has already seen a larger-than-predicted Bitcoin rise, Coutts attributes this to the early stage of the liquidity cycle, with the sharpest price responses occurring initially. He anticipates further price increases, citing ongoing activity from central banks like the Federal Reserve, People's Bank of China, and European Central Bank. Mainstream forecasts project modest but persistent liquidity growth, suggesting potential for substantial Bitcoin gains through 2030, even under conservative estimates. Coutts acknowledges that the relationship between liquidity and Bitcoin price moderates over time, but his analysis suggests significant upside potential remains, fueled by increased global liquidity. He even mentions the possibility of a “panic buying” event further accelerating Bitcoin's price. However, this projection is based on a model and past performance is not indicative of future results. The inherent volatility of cryptocurrency markets should be considered. At the time of the report, Bitcoin was trading at approximately $107,676.
(Source: https://www.newsbtc.com/bitcoin-news/bitcoin-could-jump-20-for-every-1-liquidity-boost-expert/)
