The Bitcoin Layer BITCOIN PUMPING: Fed Cuts, Liquidity, & The Next Breakout
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Oct 3, 2025 Bitcoin kicks off October with a strong rally amid shifting macro conditions. Falling interest rates and dollar weakness are enhancing liquidity for both Bitcoin and stocks. The correlation between Bitcoin and traditional markets is crucial as the Fed is expected to lower rates, which could further bolster risk assets. Nik explores how average wage growth signals inflation risks and dives into the complexities of liquidity cycles, emphasizing their short-term benefits versus the long-term advantages of Bitcoin's adoption.
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Liquidity Links Bitcoin And Stocks
- Bitcoin and stocks often move together because both are primary recipients of macro liquidity.
- TBL Liquidity focuses on rates, the Treasury market, and the dollar as key external drivers of Bitcoin.
Fed Moving From Restrictive To Less Restrictive
- Nik argues the Fed is shifting from restrictive to less restrictive policy and will cut rates further.
- He says the next ~1% of cuts is a foregone conclusion because the Fed must move below ~3% to stop being restrictive.
Lower Yields Quiet Volatility And Boost Liquidity
- Declining yields and lower bond volatility reflect the market's low probability of a large inflation spike.
- That decline feeds dollar weakness and creates supportive liquidity for Bitcoin and equities.