Economist and investor Raoul Pal identifies the growth of global money supply as a key factor driving Bitcoin's price movements over the past two years.
Growth of Money Supply and Bitcoin
Raoul Pal, co-founder of Real Vision, shared a graph showing the correlation between Bitcoin price movements and the increase in global money supply (M2) over the past two years. Pal asserts that the increase in liquidity in the global economy, driven by the injection of trillions of dollars, has resulted in higher M2, which has closely followed Bitcoin's price increases. According to his findings, 89% of Bitcoin's price fluctuations can be explained by this correlation. He noted, 'By definition, almost all ‘news’ and ‘narratives’ are noise.'
Bitcoin as the New Bonds
Angel investor Anthony Pompliano expressed his belief that Bitcoin could be the 'new bonds.' He stated, 'Once this concept is accepted, everything begins to make much more sense.' This perspective aligns with the 'BitBonds' concept presented in a Forbes article. The article discusses the possibility of US Treasury bonds being supported by Bitcoin. In such a scenario, as part of bond revenue ties to Bitcoin’s capped supply of 21 million, interest costs could potentially decrease.
Conclusion
Raoul Pal's analysis and Anthony Pompliano's views underscore the importance of global money supply in the context of Bitcoin pricing. The discussion of Bitcoin as a new form of bonds opens new horizons for understanding Bitcoin's role in the modern financial system and its potential impact on traditional market instruments.
In a changing economic environment, Bitcoin remains a focal point as an asset capable of adapting to new financial realities.
