Degrossing Now, Bitcoin Moonshot Next? Here’s The Case, Says Analyst

Felix Jauvin argues that Bitcoin's current price is due to global deleveraging, primarily driven by the unwinding of over-leveraged positions in US assets. He posits that Bitcoin's price is fundamentally linked to global liquidity, not just US equity performance. Jauvin uses Michael Howell's research showing a strong correlation between global liquidity and Bitcoin's price. He notes that the US's high fiscal deficit has fueled US asset dominance, attracting global capital. However, Trump's trade policies are encouraging other nations to increase fiscal spending, shifting global liquidity away from the US. This shift will reduce the dominance of US assets and increase the relative attractiveness of assets less tied to US economic policy. Jauvin anticipates a decoupling of Bitcoin's price from US equities as global liquidity flows shift. He views the current market downturn as a necessary correction before Bitcoin benefits from this global liquidity shift. He believes Bitcoin is uniquely positioned to benefit from this shift, as it is unaffected by national borders or tariffs. Jauvin concludes that Bitcoin is poised for significant growth once the current deleveraging is complete.