Transcription
Hello everyone, it's Atrid, your financial analyst for 7 years, present in the crypto market, holder of a financial investment advisor certification, also holder of a bachelor's and master's degree in banking and financial law. And I make videos on YouTube and for my private community to explain market movements and what are the best behaviors to adopt to make the most possible gains and especially how to avoid the most losses in times like the ones we are currently experiencing. A short video on liquidity today because it's extremely important and we've had changes that have appeared over the last 2 weeks that deserve a short video on the subject. The first point I really want to come back to is the correlation between the Bitcoin crypto market and liquidity. So you can see here, we have a chart that was made by Raoul Pal and his crew, which is very effective. Moreover, some members hold the CFA, which is the most difficult diploma in economics. It's far ahead of a master's at HEC and the like. So these are people who know what they're talking about, and they established this chart which shows that Bitcoin has a 90% correlation with liquidity. You have the red dots which are Bitcoin, liquidity here in black. And what we can see is that, of course, Bitcoin doesn't strictly follow this liquidity to the dollar. But when we average the standard deviations, we clearly see that Bitcoin follows this liquidity by 90%. We inevitably have discrepancies, meaning there are times when Bitcoin is too low relative to liquidity, times when it's too high, and Bitcoin makes up for it each time. I've already explained to you why these discrepancies occur. There are periods of time during which monetary policies are too much, meaning far too much in favor of monetary easing, and so people get carried away, there's emotion, they buy massively, they take massive leverage, and then a standard deviation is created that is far too much in favor of a subsequent catch-up. And there are also other periods of time like the one we are experiencing now where there is fear. There is fear because there are short-term or medium-term bearish narratives, and so, naturally, people refrain from buying despite the liquidity. They stay in fiat or stablecoins, they wait for everything to calm down, and so we have a price that is too low relative to liquidity. Now, these catch-ups constantly happen, and therefore liquidity is the number 1 factor because if there is no liquidity, there will be no rising prices. It's as simple as that. If there is liquidity, there are two hypotheses. Are people reassured, in which case yes, they buy, or are people not reassured, in which case they will wait? And so we need to look at what has been blocking things until now, since this summer approximately. What was predictable? What was not, and why are we here today? This is something that is extremely important because, as someone who produces content on YouTube and has a community, it's true that communities, rightly so, often ask themselves, "But why didn't our favorite YouTubers anticipate what was coming? Why didn't our analysts tell us what the reasons are?" The reasons are very simple: there are things that are predictable, like what I'm going to show you today. There are other things that we cannot predict. We are tied to the news that comes out, to policies, to presidents who do more or less anything. We know some who create a lot of uncertainty in the markets. And so, all we can do is navigate by sight. We navigate by sight, we take a piece of news and we process it. Will this news have positive or negative effects? Yes. No. In the short term, medium term, long term. Very well. And based on these parameters, we make investment decisions. These decisions are to strengthen our positions, lighten the portfolio, set stop-losses, set take-profits, and so on and so forth. And so, what we've had since last summer, in fact, are narratives that we couldn't anticipate and which unfortunately annoy everyone a bit. Just before we start, subscribe to the YouTube channel and especially join our private community on medium-crypto.fr. You'll go to the link in the description, click here to register, and you'll watch these short 2-minute videos that will explain why you absolutely must join us as quickly as possible to make the right decisions regarding your portfolio and the narrative we are currently experiencing, and especially the one we will experience in 2026. The first bearish narrative was bank reserves. You can see here, I've put several things. These three curves right here, we have M0 in blue, M1 in green, M2 in orange. And what you can see is that since the bottom, or even a bit after the 2023 bottom, we have M1 and M2 that are resuming growth, a sign that liquidity is returning to the system. M0 started to grow earlier, and what we see is that since around here, July 2025, it has been depreciating. What is this M0? It's monetary creation in the strict sense, meaning banknotes, currency, but especially bank reserves with the Fed. This chart is here, I've already shown it to you, it's bank reserves with the Fed that have been falling drastically since last summer. This was the subject of a report by Audi, one of my moderators in the private community, who had already explained to the community in October why the Fed had no choice but to stop its QT by January at the latest, but preferably by December. The calculations were extremely precise because these reserves must not reach an extreme emergency threshold relative to GDP. And we are reaching this threshold. Audi published it 2 to 3 months before Jerome Powell's speech announcing the end of QT in early December. And so, we were right about that, that was the first problem. The second problem was, of course, this bearish narrative, but it was also the QT. When could the QT legitimately end? And on this, I announced to you no later than in a video that was 8 days ago, right here with our dear friend Jerome Powell in the thumbnail, that they would indeed have to stop the QT because there was a need for monetary printing in the very short term, not only to recapitalize banks but also to pay the debt that is maturing now and especially in 2026. I also explained in this same video that the Fed would not use the term QE but would likely use the term RMP to talk about managing cash, putting cash back into the economy in the very short term, because the Fed has several stimuli. The first stimulus is to lower rates. Lowering rates is good, but it will create liquidity in the medium term. Why? Because the rates, or rather the rate corridor set by the Fed, is gently decreasing. And within this rate corridor, we find the rates at which banks can borrow from the Fed. And naturally, well, if rates fall, then commercial banks that grant credit to commercial clients, private clients, and so on, will also be able to lower rates because if they borrow at 4% from the Fed, they won't allow their clients to borrow at 3%. Otherwise, there's a deficit, there's a negative margin. They will have to set higher rates. And if they set rates that are too high, then banks have legislation to respect. They must ask for income conditions, solvency conditions, and you end up with far fewer people eligible for credit, and less credit means less money creation through debt. So by lowering rates, we will indeed have an easing of these conditions, which will de facto lead to a resurgence of credit and money being created through this system. But in the medium term. However, when we talk about QE/DRMP, which is the same thing, it's monetary printing to support the financial system. Here, you have direct monetary printing. The impact is felt immediately in the coming weeks, not in the coming months, at the economic level. And this is an important point because, as we know, the Fed will buy T-bills not only from the US government but also directly from banks that hold them. And this will allow us to see that M1 and M2 will continue to rise. But especially this famous M0 will resume an upward trend, a bit like here. And this will indeed be very positive for risk markets, stock markets, and also crypto markets. There is another problem we had and which we could not anticipate: the US government shutdown. The US government has a bank account called the TGA, the Treasury General Account. It's the Treasury. It's where all tax revenues are received. It's also where money from the Fed comes in when the Fed buys securities from it. And this account fills up over time and also flows back into the economy. You can see here during Covid, it reached a peak of $1.8 trillion and then this peak decreased. Why? Because the Treasury collects money, either from tax revenues or from the Fed, which will support the economy and also buy government bonds. And then, the money flows out. The money flows out in several ways. There is the repurchase by the US Treasury of government bonds, also called buybacks, we'll get to that in a few seconds, but there is also all the policy led by the state, meaning stimulus plans, support plans, financing plans, and so this money flows into the economy. What we want, in short, is to see a downward curve. Why? Because money is entering the real economy. It's no longer blocked in the TGA account. And what happened, if we zoom in here, is that this account filled up very recently. It filled up, filled up, filled up, and once it was full, we had a US government shutdown. A shutdown which, as if by chance, Trump is setting records, which was of record duration. And so we had a new mechanism that compressed liquidity and retained liquidity in an account that doesn't serve much purpose, let's be frank. And so, we again had a new narrative where, indeed, momentarily, we had to wait because, well, we know that in the very short term, it naturally holds back liquidity. We know that in the medium term, the government will have to find solutions to restart state activities because it cannot remain in shutdown indefinitely. But again, a piece of news that we could not anticipate, which led to a blockage and which has now been unblocked. You can see that the TGA is indeed starting to empty again. This is very recent, so it naturally started between December 3rd and 10th. It's the 17th, it won't happen in 5 days. But what we want to see is taking shape. The TGA is emptying. We went from 93, we went from $937 billion to $858 billion, and it will continue. This money is flowing back into the economy, and what is quite important, this is a question I show you every time, is who is buying in the context of QE or RMP? Who is buying? Because I told you, the Fed can buy not only from the private sector but also from the public sector. When it comes to supporting the economy, as it will do soon to roll over debt, the US Treasury will issue a lot of bonds, and the Fed will buy the majority of them. So, they will print money again and again and again to buy these bonds. The Fed currently, since it has to support banks because they have much less reserves than before and they are in freefall, is buying from the private sector. So, we know that, it's buying from the private sector. And buying from the private sector means that naturally you have banks that are there, that have securities, that will give them up in exchange for cash. That's what you need to understand. They will give up their securities and get cash in return. What will they do with this cash, in your opinion? They will say, a period of growing uncertainty, we don't know what the turning point will be, will the Fed continue its tightening actions, or will we see the Fed taking tightening actions and indeed continuing to lower rates? We resume QE/RMP, and therefore, the other part, we can gently invest it to take positions and make money. In your opinion, what will they do? Everyone will have their opinion. I have mine, and so we know that it's buying from the private sector. The other typical case is the TGA. I told you not too long ago, just a few minutes ago, that it could do what's called a buyback. What is a buyback? It's this. Basically, the US Treasury issued debt in the past, issued US Treasury bonds that were bought by various actors, including the private sector. And here you have public entities. That's why you need to be curious and go digging around to see what's happening. And well, you have the US Treasury doing buybacks with the agenda right here. So, the agenda is renewed every 2 to 3 months approximately, and here we can see since November 17th what they are buying. So we also see bonds with a maturity of 5 to 7 years. Here, under 20 to 30 years. Here, from 1 to 10 years. But most importantly, we see the billions it represents. 4 billion, 2 billion, 12.5 billion, 12.5 billion, 4 billion, 2 billion, 2 billion, and so on and so forth. And these are purchases that are almost weekly or at least bi-monthly. And the question that arises is, who are they buying this from, the TGA? Are they buying from the Fed? No, the Fed is no longer in QT. So, no longer in QT means the Fed no longer lets them expire without buying them back, and especially the Fed is no longer selling either. So, who are they buying from if not the Fed? Well, they are buying from the private sector. And so, we will not only have a TGA that will empty, but we will also have M0 that will rise, M1 that will rise, and M2 that will also rise. Still on the liquidity front, what's important, I told you and I've already explained it to you several times, I'll show it to you. It's not M2, which is here, the blue line that grows over time because there's more and more money being created and printed in the monetary system. What we want to know to understand where we're going, it's not that. It's the growth of M2 year after year in percentage terms, and you can see that it correlates much more with Bitcoin's movements than the overall M2 that we can find on TradingView. In 2021, we had significant money creation, if you know that. Then, we emptied very quickly, and at that point, we could already have confirmation that we were entering a bear market for Bitcoin. Whereas if we only looked at M2, it was growing over time, and we couldn't anticipate anything. Currently, we would be here in the trough relative to Bitcoin, just before the big rebound. And what's super interesting is that we can see that the curve, if we zoom in a bit, is really taking an upward direction. Will we make a new ATH in year-over-year growth? I don't know. But what's super interesting, I told you, is to compare year-over-year money creation. Why? Because currently, it's December 17th, and we see that M2 is growing by 9% compared to last year. This means that compared to December 2024, we are on a money creation of over 10%. Remember, Bitcoin is correlated with money creation and liquidity by 90%. And so, what's interesting is to look at where we were in December 2024. December 2024, if we just had these H curves that slightly obscure the reading. December 2024, we were here at $104,000. So, what we are saying and what we are seeing is that we have more liquidity creation now than we did a year ago. And a year ago, we were at $104,000, we are at $86,000. So, we have an environment, when we talk about liquidity, that is more conducive now to prices of at least $104,000 or more than it was back then. So, why are we lower? We've also answered that question: it's because we have an uncertain environment. There was the government shutdown, there is the banking liquidity stress which is still present, by the way. There is also Japan causing some trouble. We'll come back to that in a future video because I'll first discuss it with the private group members tomorrow evening during the live session. But once these narratives gently pass tomorrow and everyone is a little reassured, there will be a catch-up for Bitcoin, and a very big catch-up, believe me. And that's why it's important to take all of this into consideration, to look at it, because if we miss it, we don't know what will happen. And that's why I'm telling you to subscribe, to join us, because this is where you need to manage well. I know the reality, those who say otherwise are perhaps 1 in 100 traders, but the reality is that at the moment, a vast majority is stuck in this movement. A vast majority is stuck. There are people who, following the October 6th event, said, "I'm buying here" because it's a massive position following an enormous manipulation movement that we've never seen in the crypto market. Well, what followed right after was a continuation of the bearish movement, which was indeed very difficult to anticipate. So, the majority of people are stuck and are asking themselves, "Should I absolutely follow what's being said on YouTube at a time when everyone is starting to switch to bear, announcing a crazy bear market, a return to $50,000. We were supposed to be there a week and a half ago according to several YouTubers." So, you need to be a bit careful. Look at the most convincing elements to know where we're going in the medium term. And that's why you need to be well-surrounded. We have a profile, and I repeat, that should be an investor profile. Those who are in the crypto market to make money within a few weeks or even a month and a half to two months, and who are mentally geared like that, very few will succeed, but most often will be victims of these kinds of movements because they arrive 80% of the time in crypto. That's a ratio and a statistic that is true. 80% of the time in crypto, and especially in altcoins, the movements are bearish or in a range. We have bullish extensions present only 15% of the time. So, the real mindset you need to have is a Warren Buffett mindset. That is, we identify companies, we identify cryptocurrencies that are undervalued, meaning that the token price of the company is too low. And that's where you need real skills and to be surrounded by a community that has these skills: to identify these undervalued assets, these companies. Because the reasoning, I'll give it to you, it's very simple. What we want to identify are undervalued cryptos. I won't tell you which ones. If you want to know which ones, join the community, there's a link in the description. But we want to identify undervalued companies because even if there's a bearish movement, we know that everything is cyclical. Everything is cyclical. There are corrections, there are bear markets, just as it's cyclical, these assets, once they make a comeback, will regain value extremely quickly because they will attract the most investors. A true story just before we finish, we'll go to the S&P 500 and I'll show you something that happened during the 2000s. During the 2000s, we had this, a big, big bear market, the bursting of the dot-com bubble, which lasted almost 2.5 years. Well, did you know that Warren Buffett, considered the greatest investor of all time, well, Warren Buffett was in it. He was in it. He had acquired a lot of shares until, I believe, January 2000, just before the crash. And he didn't sell anything. He didn't sell anything. He was labeled as the big loser of the internet crisis. He was labeled as finished, the worst investor of all time during the 2000s because he was in unrealized losses for 2 years of nearly $200 billion. Imagine what it's like to be at minus $200 billion for 2 years. And Warren Buffett's calculation is extremely simple. We don't look at what others are doing. We don't panic because others are panicking. We have a calculation that is truly childishly simple. We look at our trading profile. Are we a scalper, a day trader, an investor? Warren Buffett is an investor. So, what matters to him is not so much the timing, but knowing that what he has in front of him, meaning the stock he's buying, is undervalued. In that case, he knows he will make a profit. He doesn't know if it will be in 6 months, in a year, but it doesn't matter, he has time. He's been in the market for over 50 years, even more. So, the guy is used to it. So, you too, you need to ask yourself the question. Do a real introspection. Do you really want to improve your skills, make money not in the next 6 months and then blow up your account, or do you want to make money over the next 10, 15, 20 years? Because if that's what you want, then you really need to change your trading psychology, change your way of approaching the market, because the market in the very long term is like this: there are downturns, for sure, but in the very long term, it's bullish. So, what matters most is entering into assets that will gain value and that will make you money, whether it's in 1 year, 6 months, 3 months, it doesn't matter. I'll stop here for today. I hope you enjoyed the video. If so, subscribe, leave a like, a comment, and I'll tell you on Friday or Monday, depending on when I release the next video. It's Atrid. Have a good day. Bye bye.