All major cryptocurrency bull markets have one thing in common: they coincide with massive injections of liquidity into the global economy. These liquidity surges are not random events; they are initiated by central banks and fiscal authorities, pulling along one or more of the following macro levers:
Lowering interest rates – Reducing 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
Relaxing capital regulations – Reducing restrictions on institutional risk-taking
Loan tolerance policies – Maintaining credit flow even in the face of defaults
Bank bailouts or backstops – Preventing systemic collapse and restoring confidence
Massive fiscal spending – Governments directly injecting funds 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 – Actions by other countries' central banks affecting the crypto market through capital flows
Emergency credit mechanisms – Temporary lending tools established during crises
These actions not only drive up traditional assets but also trigger the 'speculative frenzy' mentioned by Jesse. As the highest-risk but potentially most rewarding asset in the system, cryptocurrencies often benefit the most.