All major crypto bull markets have one thing in common: they 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 one or more of the following macro levers:
Interest Rate Cuts – 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
Lower Reserve Requirements – Increasing the amount of 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 Backstops – Preventing systemic collapse and restoring confidence
Massive Fiscal Spending – Directly injecting funds into the real economy by the government
Release of U.S. Treasury General Account (TGA) funds – Injecting cash from the Treasury's account into the market
Overseas QE and Global Liquidity – Actions by foreign 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 what Jesse refers to as 'speculative frenzy.' Cryptocurrencies, being the riskiest yet most potential-laden assets in the system, often benefit the most.