Isn’t a big part of the story there that BTC’s price in USD is very rate-sensitive? So when money supply goes up, discount rate goes down and “risk assets” - including BTC, for now - increase due to the DCF model?
Discussion
I’m not sure. I only understand these things on a very basic level. I’ll do some reading and get back to you.
There are also some other measures of money supply that paint a prettier picture. Here’s BTC’s price against those:
Sounds good mate
My post was uninformed and misleading. I just found the linked article, which says that in April 2020, the fed started counting savings account balances in M1 money supply for the first time, explaining the 500% spike at that time.
I’m baffled that they’d just trash the M1 chart like this. It’s now useless. If I did this at my job, I’d be fired.
https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/
Thanks for sharing. Seems like as a measure of liquidity in the money supply, it’s just reflecting what has changed. I can see how it’s frustrating that it’s a break in the time series, but it’s just showing liquidity at the end of the day