Bitcoin, monetary liquidity and growth forecasts

Simulating Bitcoin's growth based on monetary liquidity scenarios

The vast majority of investors are positioned for a soft landing.

A soft landing would likely be accompanied by some rate cuts and the end of the balance sheet reduction program in both the US and the EU.

Meanwhile, China is being forced to stimulate its economy, which isn't really recovering from the COVID-19 pandemic.

If events unfold this way, monetary liquidity should grow once more.

This is generally considered a good thing for Bitcoin. But can we quantify its impact?

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Bitcoin, monetary liquidity and growth forecasts

The takeaway

Monetary liquidity growth strongly influences Bitcoin's performance.

Higher liquidity growth correlates with better Bitcoin returns, despite increased volatility.

Risk-adjusted returns for Bitcoin improve as monetary liquidity growth increases.

Simulations suggest Bitcoin could approach $100,000 within six months, even under conservative growth scenarios.

While projections carry significant uncertainty, the overall trend for Bitcoin appears positive across various monetary liquidity scenarios.

Three monetary liquidity regimes