Why Bitcoin Is Reacting More to Liquidity Than to Interest Rate Cuts

Key takeaways

• Bitcoin now responds more to liquidity than to rate cuts. While rate cuts once drove crypto rallies, Bitcoin’s recent price action reflects actual cash availability and risk capital in the system, not just borrowing costs.

• Interest rates and liquidity are not the same. Rates measure the price of money, while liquidity reflects the amount of money circulating. Bitcoin reacts more when liquidity tightens or loosens, even if rates move in the opposite direction.

• When liquidity is abundant,…