In an analysis shared via Ted’s insights are based on four critical indicators related to traditional finance and crypto liquidity, each pointing to continued growth in the near future. Here’s an overview of his analysis:
#1 65-month liquidity cycle
Ted highlights the 65-month liquidity cycle, a historical pattern that marks the ebb and flow of liquidity in the financial markets. According to his analysis, this cycle bottomed out in October 2023, marking the beginning of a new expansion phase.
“We are now in the expansion phase, which is expected to culminate in 2026,” said Ted. This projection is consistent with expected central bank easing in response to slowing economic data over the next 18 to 24 months. Historically, increased liquidity has been a precursor to bull markets in several asset classes, including Bitcoin and the broader crypto ecosystem.
#2 M2 Money supply
The M2 money supply, which includes both cash and check deposits and is easily convertible into money, is another crucial indicator, if not the most important indicator of global liquidity. Ted notes that the growth rate of the M2 money supply is at its lowest point since the 1990s.
“There is plenty of room for positive developments to ease liquidity conditions,” he explains. Because central banks can potentially ease monetary policy to stimulate economies, increased M2 growth could lead to more capital flowing into risky assets like Bitcoin.
#3 Crypto Liquidity
Although liquidity has returned to the crypto markets, especially with the introduction of spot Bitcoin ETFs, Ted points out that the speed of inflows has not yet reached the levels we see at the top of the cycle. “The rate of influx has not yet experienced a manic phase consistent with cycle tops,” he noted.
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This suggests that while interest and investment in Bitcoin is growing, the market has not yet reached the speculative frenzy that typically precedes a major correction. This phase of measured inflows can provide a more stable basis for continued price increases.
#4 Discover Bitcoin ETF Flows
The US-based spot Bitcoin ETFs have seen significant inflows, with $950 million flowing into US spot Bitcoin ETFs last week alone, the largest net inflows since March. Ted expects these inflows to increase as Bitcoin’s price rises and traditional financial investors regain confidence in the asset.
“Expect these to only rise as the price moves higher and TradeFi renews confidence in the asset,” he stated. The growing adoption and investment of institutional investors through ETFs is a strong bullish indicator for Bitcoin’s continued rise.
Each of these factors points to an ongoing and robust bull market for Bitcoin. Ted’s analysis, based on traditional financial indicators and crypto-specific data, provides a comprehensive view of the current and future state of the Bitcoin market. With central banks potentially easing monetary policy and institutional interest continuing to grow, conditions appear ripe for Bitcoin’s bull run to continue well into the coming years.
At the time of writing, BTC was trading at $66,602.
Featured image created with DALL·E, chart from TradingView.com