The Milk Road Show How Do You Time Altcoin Season Based on Macro? w/ Andreas Steno Larsen
Feb 13, 2025
In a captivating discussion, Andreas Steno Larsen, CIO at Steno Global Macro Fund and CEO at Steno Research, unveils the powerful market forces beyond just Treasury actions. He emphasizes understanding money creation and liquidity’s role in influencing risk assets. With insights on altcoin seasons, he predicts potential investment opportunities driven by institutional interest, while cautioning against volatile risks. Larsen also delves into the impact of geopolitical dynamics and financial innovations shaping the crypto landscape.
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Three Liquidity Sources
- The Federal Reserve isn't the only source of liquidity; private banks and the public sector also create money.
- Banks create money through loans, and governments inject liquidity through deficit spending.
Treasury Liquidity Injection
- The US Treasury can inject liquidity by spending from its account at the Federal Reserve.
- This is due to the current debt ceiling, preventing new debt issuance, providing temporary liquidity.
Private Sector Liquidity
- Increased loan demand suggests businesses and households plan expansion, indicating economic optimism.
- This private sector lending creates new money, boosting liquidity independent of central bank actions.