There is only one question in the minds of everyone who has invested in the cryptocurrency market in some way. Why is the cryptocurrency market, which once turned green almost every day, so stagnant? After all, when will we wake up to the days of green graphics flying again?
If you are ready, let’s take a trip in time. Let’s go back a little bit to the pandemic process where the Covid-19 epidemic started and brought with it.
The graph you see in the image shows the All Assets of the US Federal Reserve, the rises you see in the graph indicate that the USA is printing money (Balance Sheet Expansion), while the decreases indicate that the USA is reducing the money circulating in the market (Balance Sheet Narrowing).
The USA, which started to print money as of September 2019, printed money very seriously to prevent a possible collapse with the start of the Pandemic process when it came to March 2020. As a matter of fact, when there was so much money in the market, inflation peaked in the USA. After March 2022, they started to increase interest rates and decrease the money in the market in order to reduce inflation.
Let’s take a look at the link between the total amount of money circulating in the market and the price of Bitcoin.
The blue lines you see in the chart show the liquidity of the 3 major central banks, and the yellow line shows the BTC price.
As can be understood from all these, the more money there is in the world, the higher the rise will be in the markets. Because in order to buy any cryptocurrency, we basically need money.
Central banks need to cut interest rates and start printing money in order for the markets to revive. Of course, this does not mean that if they start printing money tomorrow, the markets will fly away on the same day or nothing will happen before.
It would be logical to follow the global economy closely and make various investments according to your own strategy and risk understanding before the transition to the aforementioned abundance period.
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