All large-scale crypto bull markets share one commonality: they coincide with massive injections of liquidity into the global economy. These liquidity surges are not random events, but are initiated by central banks and fiscal authorities, pulling along one or more of the following macro leverages:
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 not to raise interest rates) – Influencing market sentiment by releasing expectations of low interest rates in the future
Lower reserve requirements – Increasing the amount of funds banks can lend
Easing capital regulations – Reducing constraints on institutions taking risks
Loan forbearance policies – Maintaining credit flow even in the face 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 – Actions by foreign central banks impacting the crypto market through capital flows
Emergency credit facilities – Temporary lending tools established during crises
These actions not only drive up traditional assets but also trigger what Jesse refers to as 'speculative frenzy.' Cryptocurrencies, being the highest-risk but potentially most rewarding assets in the system, often benefit the most.