Bitcoin now measures liquidity better than any asset in traditional finance as professional investors turn to the unregulated digital phenomenon as a hedge against the US Federal Reserve’s pivot to flood the financial system with more liquidity.
On March 16, the US Fed announced its bank term funding program to ensure US banks have sufficient liquidity to meet depositors demands after the collapse of Silicon Valley Bank. via more regular funding swap lines with the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and Swiss National Bank.Bitcoin’s price action over the last week has also decisively broken its reputation as a barometer of risk appetite correlated to high-growth equities.
Howell is the founder of $US1 billion multi-asset asset manager Cross Border Capital, and defines liquidity as the total sum of wholesale cash and credit passing through world financial markets, as opposed to retail money supply.