4 reasons why Bitcoin's price increase will last a long time

Ted's arguments are based on four key metrics related to traditional finance and cryptocurrency liquidity, each pointing to sustainable growth in the near future.

1. Liquidity cycle 65 months

Ted highlights the 65-month liquidity cycle, a historical pattern that marks the ebb and flow of liquidity in financial markets. According to his analysis, this cycle bottoms out in October 2023, signaling the start of a new expansion phase.

Ted said: 'We are currently in an expansion phase, which is expected to peak in 2026.' This forecast is in line with central banks' policy easing plans, in response to slowing economic data over the next 18 to 24 months.

In the past, increased liquidity has been a precursor to bull markets in various asset classes, including Bitcoin and the broader cryptocurrency ecosystem.

Liquidity cycle 65 months | Source: @tedtalksmacro

2. M2 money supply

M2 money supply, which includes cash, checking deposits and convertible notes, is another important indicator. This is the most important indicator of global liquidity.

Ted noted that the pace of M2 money supply expansion is at its lowest since the 1990s.

'There is plenty of upside potential to ease liquidity conditions,' he explained. As central banks have the ability to loosen monetary policy to stimulate the economy, increased M2 growth could generate capital inflows into risky assets such as Bitcoin.

M2 Money Supply | Source: @tedtalksmacro

3. Cryptocurrency liquidity

Although liquidity has returned to the cryptocurrency market, especially with the introduction of the Bitcoin spot ETF, Ted pointed out that the pace of capital flows has not yet reached the levels seen at the peak of the cycle.

He noted: 'The pace of capital flows has not yet reached the euphoric phase consistent with the peak of the cycle.'

This suggests that, although interest and investment in Bitcoin is growing, the market has not yet reached the level of frenzied speculation that typically precedes a major correction. Therefore, this signal could provide a stable foundation for continued growth.

Cryptocurrency Liquidity | Source: @tedtalksmacro

4. Spot Bitcoin ETF inflows

US-based Bitcoin spot ETFs have seen large inflows, last week alone they saw $950 million inflows, the largest net inflow since March 2024.

He expects strong capital inflows as prices move higher and traditional financial markets once again regain confidence in crypto assets. The growing adoption and investment from institutional investors through ETFs is a strong bullish indicator, suggesting that Bitcoin will continue to rise.

Bitcoin ETF spot inflows | Source: @tedtalksmacro

All of these factors point to a strong and sustainable bull market for Bitcoin.

Ted's analysis, based on traditional financial indicators and cryptocurrency-specific data, provides a comprehensive view of the current and future state of the Bitcoin market.

With central banks potentially easing monetary policy and institutional investors increasingly interested in cryptocurrencies, conditions appear to be 'ripe' to trigger a sustained Bitcoin bull run in the coming years.

At the time of writing at 7:00 a.m. today, May 21, Bitcoin is trading at 71,286 USD.

Kareem Winters

Update 22 May 2024