All major cryptocurrency 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 are initiated by central banks and fiscal authorities, pulling on 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 rates in the future
Lowering Reserve Requirements – Increasing the funds banks can lend
Easing Capital Regulations – Reducing restrictions on institutional risk-taking
Loan Forbearance Policies – Maintaining credit flow even in the event of defaults
Bank Bailouts or Backstopping – Preventing systemic collapse and recovery