Author: hooem
Translated by: Tim, PANews.
The title of this article makes you think: 'Has hooem gone crazy?' But after reading the full text, you will exclaim: 'I must be prepared for the big bull market!' Yes, Bitcoin soared from $16,000 to $110,000 in three years, but has the real bull market really started? I know this sounds crazy, but evidence suggests that due to macroeconomic constraints, the 'real' bull market has not yet launched.
Despite witnessing the largest institutional entry into Bitcoin in history, altcoins have performed poorly throughout the cycle, with several mini bear markets occurring during this period.
My live footage: a man in his twenties is waiting for the bull market.
I watched a video by Jesse on YouTube, where he deeply analyzed the reasons behind the crypto bull markets of 2013, 2017, and 2021. No, it’s not just the four-year cycle at play; there are deeper driving factors behind it, and those conditions have not appeared simultaneously since then.
I want to organize his video content into this article.
If you study what ignited the bull market frenzy, you will find it’s not narrative logic or hope as a delusional agent, but rather the macro liquidity mechanism, and you will realize we are merely in the prologue.
Jesse mentioned 11 liquidity rings.
(Note: The original text refers to liquidity Rings of Power, where Rings of Power is derived from Western fantasy IP (The Lord of the Rings), and this article translates it as liquidity rings.)
The 12th liquidity ring is about to ignite all the rings; I will elaborate on this later, as it has just emitted a brief glow like a ring.
If you want to understand:
Why past economic cycles have collapsed.
How macroeconomic tools truly fuel the market.
Key triggers that ultimately ignite the fuse.
So you need to read this article carefully.
This chart shows the 'self-indulgent article' about the bull market that I wrote earlier today.
Why has the real crypto bull market not yet begun?
Before the frenzy erupts, we need to grasp the complete macro framework.
The marvelous magic of the liquidity ring: the inflow mechanism in the cryptocurrency market.
All major bull markets share a common point: they coincide with large-scale liquidity injections globally. This surge in liquidity is not coincidental, but rather the result of macroeconomic policies driven by central banks and fiscal authorities.
1. Interest rate cuts: lower borrowing costs stimulate debt-driven economic growth.
2. Quantitative easing: central banks purchase government bonds to inject cash into the circulation system.
3. Forward guidance (no rate hike commitment): guiding expectations through signaling future low rates.
4. Lowering the reserve requirement ratio: reducing the funds banks need to hold allows for an increase in lendable funds.
5. Easing capital requirements: reducing institutional constraints on risk-taking.
6. Loan grace policies: maintaining credit flow during defaults or economic downturns.
7. Bank rescue or support measures: preventing systemic collapse and restoring market confidence.
8. Large-scale fiscal spending: government funds injected directly into the real economy.
9. U.S. Treasury General Account (TGA) cash release operation—releasing cash from the Treasury account into circulation to increase cash supply.
10. Foreign quantitative easing policies and global liquidity: Central banks' overseas operations affect the crypto market through capital flows.
11. Emergency credit facility tools: temporary loan programs established during times of crisis.
These actions not only drive up traditional asset prices but also trigger what Jesse calls speculative frenzy. As the highest-risk and highest-upside asset in the financial system, cryptocurrencies have always been the biggest beneficiaries.
Each 'ring' can operate at different intensities. When several rings spin simultaneously, their effects will create a multiplier effect, igniting a fervent rally across the entire market.
I am ready to tell you all about the powerful magic of the twelfth ring.
One ring to defeat all: economic pain.
The only command driving the 11 rings: economic pain.
Historical cases include:
2008 to 2009: Financial crisis → comprehensive quantitative easing, zero interest rates, emergency assistance.
2020: COVID crash → unprecedented global liquidity, stimulus cash checks, record M2 money growth.
Currently: We have recently witnessed a bear market crash in the stock market within a record time, but is that really enough? The market firepower has not yet fully unleashed, and the authorities' attitude remains stubborn, especially against the backdrop of such a strong market recovery.
More signs show: the recent manufacturing employment survey data released by the Richmond Fed is -18, worse than 2020 (-12) and 2008 (-14), indicating massive unemployment in the industrial sector. This is precisely the data indicator used by the Fed.
No rings are in existence.
Hello, is this the Ring of Power? It’s time to unleash its might.
Although the crypto market has seen some recent gains, the real bull market has not yet started. Most liquidity leverages remain dormant or constrained. Although we are moving in the right direction, we are still some distance from the final phase.
Year-on-year growth of M2 is the key indicator.
Without new large-scale liquidity injections, the conditions that fueled past frenzies no longer exist.
This is why the recent market rise has been orderly, driven by adoption, and led by institutions, rather than a retail-driven, frenzied bull market.
There is fundamentally not enough idle money in the financial system to create a bubble-like frenzy.
Historical bull markets and corresponding liquidity conditions:
2013
• Interest rates maintained at 0%.
• Comprehensive implementation of quantitative easing.
• Government expenditures are at a high level.
Result: Bitcoin rose from under $15 to over $1,000.
2017
• The U.S. interest rate hike pace is slow, with rates remaining low.
• Japan and Europe continue to implement quantitative easing policies.
• Market liquidity from 2016 continues into this year.
Result: Bitcoin skyrocketed from about $1,000 to about $20,000, with other cryptocurrencies' prices rising sharply as well.
Excluding the total market capitalization of the top 10 cryptocurrencies (2017-2018).
2021
• All liquidity control measures fully activated.
• M2 money supply increased by over 25% year-on-year.
Result: Bitcoin surged to about $69,000; other asset prices skyrocketed simultaneously.
Excluding the total market capitalization of the top 10 cryptocurrencies (2021).
In every case, the surge in liquidity preceded the bull market rise.
Comparing with other data, here are the year-on-year growth rates of M2 at these points in time:
I have briefly outlined this for you.
Key signals: M2 and PMI
Jesse emphasized these two indicators, which have consistently aligned with bull markets.
M2 money supply (year-on-year growth rate)
Tracking the growth rate of broad money. Historically, rapid monetary growth has occurred before each major market rally. Currently, M2 growth is basically flat. Although some areas are starting to reach temporary peaks (but not comparable to historical highs), this signal clearly indicates that the market has not yet gained upward momentum.
ISM Manufacturing PMI
Reliable business cycle indicator. An index above 50 indicates economic expansion; historical data shows that when the PMI (Purchasing Managers' Index) approaches or breaks through 60, cryptocurrencies often experience rising trends. However, in this cycle, the PMI index has just slightly exceeded 50 and then retreated again.
Data indicates that the macro environment has not yet turned, so we have not yet seen real frenzy.
Conclusion: The bull market is still brewing.
All past crypto bull markets began: when the macroeconomy faced difficulties, large amounts of liquidity would be released.
Currently, economic pain is accumulating, but solutions have yet to emerge. The 11 liquidity rings remain closed. Only when economic distress forces policymakers to take action will the environment necessary for a speculative frenzy truly form.
Unless large amounts of money flow in, the crypto market will remain fundamentally constrained, although it may continue to rise slowly.
The real bull market will only begin when the liquidity rings are lit, and not before.
I am waiting for the painful arrival in hopes of a new round of bull market bliss.
