Bitcoin is acting as a liquidity indicator for central bank balance sheets

Quick Take As the global world is facing extreme inflation, central banks are trying to reign in inflation by decreasing their balance sheets (quantitative tightening) and increasing interest rates. The blue line considers the central bank balance sheet of the US, Japan, UK, China, and Europe, which amounts to $760T. Down from $800T back in […]

Don't got time to read? Listen it & multi task

Quick Take

  • As the global world is facing extreme inflation, central banks are trying to reign in inflation by decreasing their balance sheets (quantitative tightening) and increasing interest rates.
  • The blue line considers the central bank balance sheet of the US, Japan, UK, China, and Europe, which amounts to $760T. Down from $800T back in May 2022.
  • The red line symbolizes the net liquidity, which equals the Fed’s total assets (Treasury + Reserve Repo).
  • The orange line is the price of Bitcoin.
  • Many narratives have been developed over the years for Bitcoin, one being an inflation hedge and another a liquidity hedge.
  • As central banks have to increase their balance sheet due to being on a credit-based system, i.e., the need for perpetual growth, BTC moves on credit expansion on balance sheets, which is seen with its latest uptick in price. These movements are significant to witness.
Bitcoin and Balance sheet: (Source: Trading View)
Bitcoin and Central Bank Balance sheet: (Source: Trading View)

The post Bitcoin is acting as a liquidity indicator for central bank balance sheets appeared first on CryptoSlate.

Latest articles by Glenn Nasta

hyrotrade
HyroTrade Cryptocurrency Trading Platform Review and Experience
Voltreum
Voltreum Announces a P2P Blockchain-Based Strategy to Trade Energy
hyrotrade review, trading offers thumbnail
Margin Trading, Copy Trading, Competitions: What Else Does Hyrotrade Offer?
Voltreum
Voltreum – A New Way to Share Energy Through Blockchain Technology
Translate »