Summary
Transcript
You’re watching Bitcoin’s price jump all over the place, but what if I told you that every single major move Bitcoin’s made since 2013 could have been predicted by one hidden factor? Now it’s not hype, it’s not random, and it’s certainly not luck. It all comes down to something called M2 liquidity, but it’s not the way that most people think about it. So in the next few minutes, I’m going to show you the one chart that reveals when Bitcoin is about to explode, and of course also when it’s going to crash. This is the secret weapon every crypto investor wishes they had, and today, I’m going to give it to you.
So stick around, because in this video, I’m going to break down the single chart you need to be watching to make your life much simpler. I’m going to show you what stage of the Bitcoin cycle we’re currently in, so you know if you should be patient now, or if you should be getting ready, and how you can use this chart to make better decisions, and of course, better being, you know, more profitable. Now real quick, if you’re new to the channel, my name is Mark Moss. I’ve been making content on Bitcoin for almost nine years. You’ve seen me speaking on some of the biggest Bitcoin stages in the world.
This year, a few months ago, I spoke on the main stage of the Bitcoin conference to 25,000 people. I’m a partner at the leading Bitcoin-focused VC hedge fund, and I’ve been using this one chart I’m about to show you to navigate the boom and bust cycles during all this time. And if you’re serious about catching the next Bitcoin bull run, then this is the only chart you need to understand. So let’s go. We’re going to jump right into this because, of course, I have a lot of data, a lot of charts to show you how to use this single one chart, but I need to show you how it works.
Okay, so the first thing, you know, saying a rising tide lifts all boats. Warren Buffett said that also when the tide goes out, you see who’s swimming naked. So we want to understand when the rising tide is going to come out, but we also don’t want to get caught naked while the tide is going out. So you already know if you’re watching this video, you’re probably already interested in Bitcoin, and you understand that the Bitcoin price moves in cycles. There’s four cycles because of the halving cycle that happens, and the price moves on that. It also moves because of other cycles.
We’re going to dig into some of those. Of course, there’s a lot more to this. However, you can see that the Bitcoin price moves up and then it comes down. Goes up, and then it comes down, goes up, and comes down, goes up and down. And you can see this cycle that’s moving like this. So the key for us is you need to understand when we’re at this part of the cycle, it’s time to buy, and when we’re at this part of the cycle, it’s time to sell. You understand what this part of the cycle is, so we’re going to break all of that down for you.
But the one chart you need to be looking at, it’s a little bit deeper than what I want to break down. It’s, yes, M2, global M2, liquidity, and so forth. So let’s just break down what M2 is. There’s a lot of misconceptions about this. There’s M1, there’s M2, and there’s M3. M2 is typically the one that we look at the most because it’s like a more of a broad money supply. It includes cash in the bank accounts, checking accounts, other deposits that are readily available and convertible to cash. So it’s sort of like liquid cash, like ready to be deployed into the system at any time.
Now, the problem that most people have, you see me use this chart all the time. This is from the FRED website, and this is the USM2. And you can see that the money supply had stayed pretty flat here around 1990, kind of started moving up. Obviously, 2008, it took a big jump up, and then, of course, 2020 went parabolic. You see me use this chart all the time, but the problem with this chart is this is what almost everybody uses, and it’s wrong. The reason why it’s wrong is because we’re in a global environment, and the dollar is the reserve currency of the world, and the US has the capital markets of the world, and in regards to Bitcoin specifically, it’s a global commodity.
So you can look at the US liquidity, but what about China and big of Japan and Europe and so forth? And so just because liquidity in the US could go down, we could see it going up in China, and they can be buying Bitcoin over there. It’s something called the George Soros called the Soros Imperial Circle. I did a whole video on that. We’ll put it in the show notes down below the Imperial Circle, and it basically talks about how money flows around the world. You have to think globally. And so everyone thinks about USM2, and they’re looking at the wrong metric.
So, for example, this is global M2. Now, there’s a whole bunch of central banks. Typically, you look at the major central banks, like the top five. That’s the Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of China. And this, if we look at this, we can see going back to 1994, again, the M2 goes up. Now, nothing ever goes up and down in a straight line. There’s plenty of down moves all throughout here. But this is a better chart to look at. So what happens over the last year, I’ve talked to so many different people.
They’re like, but Mark, how could Bitcoin go up when the USM2 is going down? Because you’re looking at USM2. So global M2. And there’s another way we can look at this, because really what we want to look at is not just the rise, but we want to look at the year over year change. So this chart goes back to 2015. And what we can see here is the amount of liquidity going into the system, and we’re looking at the rate of change as well. So the blue line is the M2 supply of the four major central banks.
And you can see that right here, we’re going to come back to this, but this is October of 2022, right here. And you can see we have been on this upward trajectory since then, not in a straight line. Now, the reason why I say October 2022 is because we can also look at total global liquidity, which is more than M2. This is available bank credit. These are lots of things. This is a chart I get from Michael Howell. And you can see that right here, the same timeframe, October 2022, you can see that the global equity shot up.
And this is a Bitcoin price chart. And you can see right here, October 22, the price of Bitcoin went up. So total global equity went up. Bitcoin price went up at the same time that M2 supply went up at the same time. So you can start to see that correlation. Now, just real quick, give myself a little credibility. In October of 2022, I made a video called There Is No Market Crash Coming and Here Is Why in October 22, the same time that was turning around. I made another one a couple months later. There is no global financial crisis coming.
New data shows why. I made another video here. Breaking data shows the Fed pivot is here. Do this now. The next one, this new data tells us it’s time to buy. So if you’ve been watching my videos for any period of time, this may not be a surprise to you. However, I want to give you the roadmap to follow. Now, real quick, before we jump into the actual historical data so you can see this, I want you to understand that it moves in cycles. It’s what I call the monetary codex. If you can break down the codex, you can see this.
And so it moves in these four year cycles. The red is the four year cycles. The black is the actual movements. So it doesn’t match 100 percent perfectly, but it gives us an idea of the timing. Not timing to know exactly tops and bottoms, but timing to know the direction that we’re in. Now, the question is, then, if we are in these cycles that go like this, the question is, there’s four phases. At what part of the cycle are we? So the four phases are consolidation. The asset is consolidating. Then it’s going into a bull market rally.
So this would be consolidation. This would be a bull market rally. This would be a bear market phase. This would be price recovery. So there’s four distinct phases. Now, anybody want to guess what phase we’re in for Bitcoin right now? Well, if you guessed, we would be in consolidation right now. And what phase comes next? Oh, yeah, that would be the bull market rally. OK, how can we see that? Let’s take a look. Let’s go back to a few cycles in history to better illustrate this point. So this is Bitcoin in global M2, not USM2, global M2, from the periods of 2013 to 2018.
And what we can see in this chart is the historical look of how this played out in real time. So this is the Bitcoin price chart from 2013 to 2018. And what we see right here on the bottom is this global M2. And up here is the Bitcoin price chart. And what we can see right here is that it was moving sort of sideways along this white line, this support line here, the breakout line. And right here, you can see that we are in this consolidation period. But right here, you can see that it broke out above the breakout line and it started to go up.
And what happened with the Bitcoin price? We had the bull market rally. And of course, the price went way up. All right. Then liquidity started to turn down. And the price of Bitcoin came down into a bear market phase, which was this entire period right here. But then we shifted. Liquidity started to turn again. And it broke out again right here, which put us into this recovery phase, where it starts kind of trending up, but not parabolically. The global M2 started spiking, which then led to this rise. More consolidation, right? Another breakout of this line and the price again went parabolic.
So you can see how when we map out global liquidity, we can see the price of Bitcoin change. You can see how the price changes. Let’s look at the next period. OK, so the next period was Bitcoin during the 2018 to 2021 run. All right. So we can see kind of the same thing. It’s good to understand how to spot these patterns. And then we’ll show you where we’re at exactly right now. So same thing. We have an M2, global M2 right here. And we can see it was rising and we were in this bull market rally.
It went up. Then M2 started turning down. Bitcoin’s price came down. This is the bear market phase of this. Then it came back up and just trended sideways. So we got this recovery phase here. Then it broke out, which brought us into this next part of the market. And now we have the sideways consolidation in the price right here. The M2 went up. And this is a key piece right here in this cycle. The M2 went up, but we didn’t have the bull market rally until here. There was a delayed gap. So the price of the level of global M2 shot up and then like a slingshot, the price of Bitcoin went up.
It’s important to understand the timing of this. All right. So as we go into finding out where we’re at right now, what we should be doing, let’s keep that in mind. All right. So now let’s go into the current phase, the current cycle that we’re in right now, which is 2021 to 2025. And when we take a look at this chart, what we can see is where we’re at, where we’re from, where we’re come from and where we’re going. So right here, we can see global M2 was still rising and we are in this bull market of 2021.
You guys remember that before the Fed started tightening things. They announced they would start tightening. Was that in November of 2021 and the price of Bitcoin started coming down. Global liquidity tapered off right here. And you can see a line. The price started trending down. Then we see global equity drop below the trend line. We went into this bear market phase right here. Global equity went up right here and we traded sideways on global equity. And we had this price recovery phase. So after the asset goes up and comes down, it has to go into this sort of price discovery phase right here.
Now, here’s the key piece. Global equity started trending up. We saw the price kind of recover here. And now for the last six months, we’ve been in this, again, price discovery phase, or I should say the consolidation phase. If you are following along, you understand that. Now, the question is right here, we can see that global M2 is starting to break out again. Now, if you’re an elementary kid and I show you a couple patterns, you typically know what happens next. So it’s followed the exact perfect framework. And now we’re seeing the breakout in global M2.
So the question is then, what should we be doing? Well, I’m going to answer that in a second, but let me show you a different chart here real quick, just to kind of bring all this together. This is basically all of these cycles put together. And so we can see the breakout right here. We can see the breakout. Right. We can see the breakout. And right here, we have a breakout. And what is coming next is the question. So the reason why I want you to understand this, you can spot these patterns is to understand what’s coming next.
Do we think that Bitcoin will follow that same pattern over again? Well, we don’t know. What we want to do is we want to follow the patterns. Now, that’s typically what happens. And like I said earlier, the important piece is that it doesn’t always move on to one-to-one ratio. But, Mark, global credit is breaking out. How can Bitcoin isn’t making new all-time highs? Well, remember, there’s a lag, like a slingshot, like we have to build it up with energy and send it out. So then the question is, we’re following the patterns. What we want to be doing is understanding where is global M2 going to come from.
Like I said, not USM2, global M2. So the first thing we want to do is listen to central bankers. The central bankers are going to tell us what’s coming. So this is a chart right here, CME Watch tool, and this shows the Federal Reserve. So the Federal Reserve, your own pal already came out and told us what they’re going to do. They are going to start easing increasing liquidity. As a matter of fact, there’s a 100% chance that they will do that. And it’s a 67% chance that it’s going to be greater than half a point.
Some people are saying it could be three quarters of a point. So this is a big, big move, but it’s bigger than that. And the reason why it’s bigger than that is because a lot of the other global central banks have already moved into easing. But the big ones, like the Bank of Japan and the Bank of China, they’ve been waiting on the Fed to move because their currencies are too linked and they couldn’t move before we saw what happened when Japan tried to do that. And so they’ve been waiting on the Fed to move.
And now the Fed has signaled their move. Now everybody else can follow suit. We can see this right here with this picture of good old criminal Christine Maguard. Global central banks are heading for a synchronized easing cycle. All right, global central banks, all the big central banks. Now the Fed has moved. They’re all going to be synchronizing together to ease, which means, yes, increasing global liquidity. So we’re listening to central bankers. They told us what they’re doing. The next thing is we want to be watching global liquidity, global M2 and liquidity. All right. Now we want to understand this point as well.
A rising tide lifts all boats, yes, but they don’t all lift at the same rate. So what this chart shows us here, the blue line is global liquidity. The white line is monetary inflation hedges, which is basically Bitcoin and gold that we have here. And what we can see is they are moving at about an 80 percent correlation factor, meaning most of the time they move together, but sometimes as highlighted in the green, they move very differently than each other. And what we can see in this example, when we look at gold and Bitcoin compared to global liquidity, is that there’s a different sensitivity.
So gold moves at about a 1.49 times sensitivity, and Bitcoin moves at 8.95 times liquidity. What does that mean? For every 10 percent increase in liquidity, you can expect gold to go up at about 14 percent. For every 10 percent rise in global liquidity, you can expect Bitcoin to go up by 90 percent. And so, yes, the rising tide will lift all boats, but different boats will lift a lot faster, which goes into my quantum wave thesis. If you’ve been hearing me talk about the quantum wave thesis, it’s Bitcoin 2.0 plus AI. It’s a cluster of technologies in this 50-year quantum wave cycle that’s going to have a massive movement based off this liquidity, a lot more than other assets that aren’t quite as sensitive.
If you want to learn more about the quantum wave cycle and the different assets that we expect to move multiples 5, 10, 20, 100 times during this, I am doing a live presentation. You can come hang out. It’s all for free. There’s a link down below if you want to come join me. I’m going to show all the charts, all the graphs, and we’ll do live Q&A. So you can ask all the questions that you have about it. It’s a good time. But understand, then there’s a link down below again. But again, understand that different assets, yes, they all move up with global liquidity, but at different rates.
Now, the next question is, now you understand this, should I wait until I start seeing Bitcoin move up? Well, as I showed you on the charts, it’s sort of like this energy builds up and it slingshots out. And what happens is we see typically big giant candles, $10,000 candles in a single day. And if you’re waiting, you’re going to miss those moves. So what you want to do is you want to move in the consolidation phase. You want to be moving before it takes off. So don’t wait too long. You want to be getting into position right now.
Right now, it’s sort of chopping like this. Whether you get in here or here, it’s fine when it goes up to here. All right. As we talked about the Bitcoin sensitivity. And if you really want to know more about these four-year cycles and how they map, not just the Bitcoin, the liquidity cycle is not not just map the Bitcoin four-year cycle, but also coincides with the four-year election cycle. It also coincides with the ISM business cycle. I did a whole video. It’s called the monetary codex, if you want to understand that. And you can just watch that video right here.
All right. Let me know what you think about this video. Give it a thumbs up if you like it. If you don’t thumbs down, that’s okay. Subscribe if you’re not already subscribed. And that’s what I got to your success. I’m out. [tr:trw].
See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.
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