Why Bitcoin Rallied 11% on Wednesday
The Breakdown
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The Global Liquidity Cycle Has Bottomed
There won't be another Fed rate decision until the end of March, so we have a few weeks to speculate. Starting in April, the Fed has now run down its balance sheet by a little more than $500 billion during its quantitative tightening program. In October, the UK government bond market had an acute liquidity crisis, which required the Bank of England to launch an emergency bond buying program. The People's Bank of China injected $400 billion in December alone via liquidity operations. Even the Fed is seeing some liquidity enter markets, though not through their own decision making.
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