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Delphi Digital
@delphi-digital
Liquidity Headwinds Play Catch Up 🔍 Heading into 2024, we outlined a speculative timeline for how things could transpire this year. Favorable liquidity conditions, launch of spot BTC ETFs, and Bitcoin Halving hype were the key catalysts for our prediction that $BTC would have a strong Q1. But our outlook wasn’t all sunshine and rainbows: 🗣️ “All these potential near-term catalysts (liquidity expansion, ETF launch, Bitcoin halving) could lose steam right around the same time in late Q1 / early Q2. This is where the greatest likelihood for a pullback or consolidation lies in my view.” - @kevinkelly So far, that’s precisely what we’ve seen play out. ⤵️ In early April, we reiterated these risks + potential headwinds for BTC and crypto markets, warning of the pain Q2 could bring. Chief among these was a less favorable liquidity backdrop relative to the prior 6-8 months.
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Delphi Digital
@delphi-digital
Unfortunately, these liquidity headwinds appear to have finally caught up. 🔹 Key takeaways : Following a strong Q4, major central bank liquidity (most notably the Fed + PBOC) has been tepid at best, not doing BTC any favors.
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Delphi Digital
@delphi-digital
Global M2 also plateaued and has contracted ~$1.7T since April, contrasting its >$4.5T expansion in Q4 2023.
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