What Bitcoin Did QE, LIQUIDITY, BONDS & BITCOIN w/ Nik Bhatia
30 snips
Mar 28, 2025 
Nik Bhatia, author of 'Layered Money' and 'The Bitcoin Age,' dives deep into modern finance. He reveals how banks shape our world and why liquidity is crucial for understanding Bitcoin. The discussion covers the Eurodollar system, the end of quantitative tightening, and the intertwining of QE and Bitcoin's role in the economy. Bhatia highlights the future of credit in a Bitcoin standard, emphasizing the nuanced relationship between monetary policy, asset prices, and Bitcoin's place in the investment landscape.
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Fed's Two Levers
- The Fed uses two levers: price and quantity of money.
- The Fed funds rate, used by banks to borrow reserves, isn't crucial for the financial system's core function.
Reserves and Repo Market
- Reserves are crucial for interbank settlements within the onshore dollar system.
- Their quantity matters as they fund the repo market, influencing overall financial stability.
Reserve Scarcity Mindset
- Banks maintain a scarcity mindset regarding reserves due to reputational risks.
- Being caught without enough reserves during settlements can trigger a snowball effect.
