Absolutely, that’s the primary challenge at the moment. We’re starting to see early signs of tightness in money circulation, but the Fed hasn’t signaled any intention to end its balance sheet runoff prematurely. Crypto more than stocks is heavily reliant on liquidity, so for the market to really push, we’d likely need either bad economic data compelling the Fed to cut rates further or a significant disruption in the debt market that forces the Fed to abandon qt.
Great piece sam, agree with you that this is only the start of the cycle.
What do you think about QT still being done, can this slow the pace of the rally?
Absolutely, that’s the primary challenge at the moment. We’re starting to see early signs of tightness in money circulation, but the Fed hasn’t signaled any intention to end its balance sheet runoff prematurely. Crypto more than stocks is heavily reliant on liquidity, so for the market to really push, we’d likely need either bad economic data compelling the Fed to cut rates further or a significant disruption in the debt market that forces the Fed to abandon qt.
Nice analysis 🔥