The Bitcoin and crypto markets altogether are affected by a specific factor. Check out the latest reports about what can cause the prices to move below.
Bitcoin and crypto market
Real Vision CEO and macro expert Raoul Pal said that Bitcoin (BTC) and the crypto markets are largely influenced by one macroeconomic factor.
Pal also said that he believes Bitcoin and the rest of the crypto markets are closely tracking the global money supply or M2.
M2 is a measure of the current money supply that takes into account cash, checking/savings deposits, money market securities, and other easily convertible assets.
“So, I like growth tech but love bonds but clearly there are always risks to this view. This is how I see the balance of probabilities. What about digital assets? From a macro perspective, the big driver is global M2 growth.”
Pal, who, as you know, is a former Goldman Sachs executive, also notes that M2 growth runs roughly inverse to the ISM Manufacturing Index.
The index is viewed as an indicator of the health of the US economy.
Pal said the following:
“As ISM falls, M2 should begin to grow…. ISM of 38, as per the model, puts M2 growth back at 13%.”
Pal also predicted that there will be a recession in the next 12-18 months.
“Monetary conditions will be much weaker. Just to be clear – I think risk assets probably go lower before reversing but not 100% sure.”
He also said the following as quoted by the online publication the Daily Hodl:
“Yes, there is a risk of an extended recession like 2001/2 or 2008/9 but I don’t really see that being the higher odds. I’m still using 1947, 1974 and 2018 as my blended hypothesis.”
At the moment of writing this article, BTC is trading in the green, and the coin is priced at $19,694. Stay tuned for more news, and make sure to check out the crypto market as well.