All major crypto bull markets have one thing in common: they all coincide with a massive injection of liquidity into the global economy. These liquidity surges are not random events, but rather initiated by central banks and fiscal authorities, pulling one or more of the following macro levers:
Interest rate cuts – Lowering borrowing costs to encourage debt-driven growth
Quantitative easing (QE) – Central banks purchasing government bonds to inject cash into the system
Forward guidance (commitment to not raise interest rates) – Influencing market sentiment by releasing expectations of low future interest rates
Lowering reserve requirements – Increasing the funds banks can lend
Relaxation of capital regulations – Reducing restrictions on institutional risk-taking
Loan tolerance policies – Maintaining credit flow even in the presence of defaults
Bank bailouts or backstops – Preventing systemic collapse and restoring confidence
Massive fiscal spending – Governments injecting funds directly into the real economy
Release of funds from the U.S. Treasury General Account (TGA) – Injecting cash from the Treasury's account into the market
Overseas QE and global liquidity – The actions of other central banks affecting the crypto market through capital flows
Emergency credit facilities – Temporary lending tools established during a crisis
These actions not only drive up traditional assets but also trigger the 'speculative frenzy' that Jesse mentioned. Cryptocurrencies, being the highest risk but most potential assets in the system, often benefit the most.