The expert believes that the price of bitcoin directly depends on the increase in the global money supply

Macroeconomist Raoul Pal identifies the main growth driver for the crypto market

13.07.2022 - 09:00

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1 min

What’s new? Raoul Pal, a former executive of the investment bank Goldman Sachs and Real Vision TV CEO, reported on Twitter that bitcoin and the cryptocurrency market, in general, are heavily influenced by a single macroeconomic factor. In question is the M2 monetary aggregate or a measure of the global money supply.

How does M2 affect the markets? M2 is a measure that takes into account the global aggregate of cash in circulation, non-cash funds in accounts, money market securities, and other easily convertible assets. According to Pal, an increase in M2 is the main growth driver for the cryptocurrency market.

Macroeconomist Lyn Alden holds a similar position. In her view, the growth in M2 is beneficial to the value of the first cryptocurrency.

Earlier, analysts at Saxo Bank cited macroeconomic changes, the introduction of regulation, institutional acceptance, and possible competition with central bank digital currencies (CBDCs) as drivers of cryptocurrency rates’ growth.

Author:

Michael Golikov Michael Golikov

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