Altcoins Poised for Growth with Rate Cuts and Rising Liquidity
CryptoNewsTerminal Staff11 Sep, 2024
Altcoins Poised for Growth with Rate Cuts and Rising Liquidity
Crypto trader Nik (@cointradernik) has analyzed the historical relationship between altcoins, interest rates, and global liquidity. He concludes that altcoins tend to perform well when global liquidity is expanding, even if interest rates are rising. Conversely, altcoins struggle when liquidity growth slows. Nik points to the altcoin bull market of 2016/2017, which occurred during a period of rising interest rates but expanding global liquidity. Similarly, altcoins outperformed Bitcoin starting in 2019 when the Fed started cutting rates. This outperformance ended when real rates started to rise from their lows. Nik believes that we are currently entering a similar rate cut cycle as mid-2019. He expects liquidity to bottom and begin expanding again. This could create a favorable environment for altcoins, similar to what was seen in 2019. It is important to note that this is just one analysis and should not be taken as financial advice. However, Nik's insights provide a valuable perspective on the potential drivers of altcoin prices.
