The global financial landscape is undergoing a significant transformation as central banks around the world increase liquidity, signaling a potentially bullish cycle for Bitcoin. Jamie Coutts, Chief Crypto Analyst at RealVision, has recently pointed out the rising momentum in global liquidity, marking the first bullish phase since November 2023.
Central Banks Boost Liquidity
In recent weeks, major central banks, including the Bank of Japan (BoJ) and the People’s Bank of China (PBoC), have injected substantial funds into their respective economies. The BoJ added $400 billion, while the PBoC contributed $97 billion. This influx has contributed to a global money base expansion of $1.2 trillion, a move supported by a weakening U.S. dollar. Coutts suggests that this coordinated liquidity boost appears to have the tacit endorsement of the Federal Reserve.
Coutts highlights that his composite global liquidity momentum model (MSI) has shifted to a bullish stance for the first time since November 2023. During that period, Bitcoin experienced a 75% rally from November to April before the momentum turned bearish.
The central banks are capitulating, the liquidity spigots are opening, and #Bitcoin is about to go much higher.
My composite global liquidity momentum model (MSI), has provided the first Bullish regime signal since November 2023. Recall that Bitcoin rallied 75% from Nov to… pic.twitter.com/ovF6qSHX8c
— Jamie Coutts CMT (@Jamie1Coutts) August 15, 2024
Historical Bitcoin Cycles
Coutts draws comparisons with previous Bitcoin cycles. In 2017, BTC saw a 19-fold increase in value, and in 2020, it rose sixfold. While predicting exact outcomes remains challenging, Coutts estimates that BTC could see a 2-3x increase in the current cycle. However, he notes that this growth is contingent on the U.S. Dollar Index (DXY) dropping below 101 and continued central bank liquidity injections. Such conditions could push global M2—a key measure of money supply—beyond $120 trillion in this cycle.
The Need for Expanding Money Supply
Coutts emphasizes that the ongoing expansion in money supply is not an anomaly but a necessary response to the demands of a credit-based fractional reserve system. In such a system, the money supply must continually grow to support rising debt levels. Without this expansion, Coutts warns, the entire financial system could face significant risks.
Bitcoin’s Potential Amid Economic Shifts
As global central banks continue to inject liquidity, the stage seems set for Bitcoin to experience another significant rally. While the future remains uncertain, the indicators suggest that Bitcoin may soon reach new heights, driven by broader economic trends and the ongoing surge in global liquidity.
Also Read: Peter Brandt Warns of Potential 40% Drop in Ethereum Prices
Source: https://www.cryptonewsz.com/realvision-chief-analyst-bitcoin-3x-in-2024/