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Capital Flows Profile picture
@Globalflows
Sep 21 • 11 tweets • 4 min read • Read on X
The liquidity flowing into crypto has more to do with the fact that the US/China relationship than it does with the Fed or "money printing."

If you understand the drivers, the next bear market won't catch you off guard 🧵
Crypto, Bitcoin, Gold, and Silver are ALL release valves for macro liquidity. I laid this out in the thread here for the current performance and BTC educational primer
The flows of liquidity are linked to credit risk and duration risk:

see these threads

-here: x.com/Globalflows/st…
-here: x.com/Globalflows/st…
-here: x.com/Globalflows/st…
-here:
People always focus on whatever source of liquidity is most politically charged in the moment. So think about, people focus on the Fed, then government spending, then treasury companies and then ETF flows. But no one seems to know WHERE all this money comes from.
Fundamentally, the dollar devaluation narrative people use for Bitcoin falls apart when you try to predict the price to impose a definition of what money actually is.

There are no rules for what money "should be"

All of this frames how the US China relationship connects to crypto. I already laid out the framework here:

Under the current international monetary system, many countries—especially China—run persistent trade surpluses with the U.S. to sustain growth through exports. To keep their currencies from appreciating (which would hurt exports), they:

- Intervene in FX markets (sell their currency, buy dollars),

- Accumulate dollar-denominated assets (primarily U.S. Treasuries, but increasingly others),

- Suppress domestic consumption to support production.

This creates a global glut of savings—primarily dollar-denominated capital—looking for places to park and grow.
Crypto is uniquely positioned to absorb and reflect the marginal flows of global liquidity, because:

- It’s unregulated, borderless, and dollar-settled,

- It reflects expectations about fiat debasement and monetary excess,

- It’s accessible to foreign capital locked out of traditional markets.

Thus, cross-border flows from global savers—especially from surplus countries like China—can end up in:

- Bitcoin and Ethereum (as long-duration digital assets),

- Stablecoins (as offshoring vehicles and dollar proxies),

- Altcoins and crypto equities (as speculative leverage vehicles).
This creates a global capital feedback loop into crypto that’s orthogonal to the Fed’s balance sheet. Even if the Fed isn’t easing, capital seeking returns or hedges against debasement will push into crypto via global liquidity spillovers.

There is a reason why Bitcoin rallied so much in lockstep with Chinese equities in 2017

It didn't have anything to do with the Bitcoin halving; it was macro liquidity from the largest balance of payments imbalance we have ever seen in history Image
As I explained in this report, the next bear market isnt likely to be driven by the Fed, it will be driven by crossborder flows as everyone is distracted by Fed watching

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More from @Globalflows

Capital Flows Profile picture
Sep 19
The current administration is addressing the actual imbalances that exist from the dollar's reserve currency status

@SteveMiran is now in a position of influence on the political side and the monetary side

This has implications for politics, markets, the Fed, and midterms🧵 Image
The current account in the US has been in free fall for years now which represents the entire import/export relationship.

In simple terms, the US imports way more than it exports. Image
The system incentivizes other countries to suppress consumption at home in order to run trade surpluses and build dollar reserves:

- Countries like Germany and China deliberately depress wages and household consumption to create large savings surpluses.

- These surpluses are exported in the form of capital outflows, which must be matched by U.S. capital inflows and thus trade deficits.

- This means American workers and firms are systematically undercut by foreign producers with artificially low costs, worsening inequality in the U.S.
Read 20 tweets
Capital Flows Profile picture
Sep 19
As we progress into the end of September, there are several critical things to reflect on and look forward to in order to understand WHERE we are in the macro regime

The credit cycle is causing equities to melt up, but risks are building

Let's dig in 🧵👇
First, as we came into the month of September, everyone was predicting a lower stock market because of the arbitrary seasonality. As I laid out in this video, this was HIGHLY unlikely given the macro flows.

If you don't know why a seasonality effect is taking place, you have no edge in monetizing it.
Second, the credit cycle remains in full force and will ALWAYS outweigh seasonality if the macro catalysts are aligned for positioning to readjust. We saw this exact thing from FOMC this past week. The most important video I've recorded this month showed that the Fed is clearly cutting into resilient growth and inflation above 2%. This inherently increases the probability of inflation as opposed to recession.
x.com/Globalflows/st…
Read 13 tweets
Capital Flows Profile picture
Sep 18
The Russell is setting up for an imminent breakout to all-time highs

This is on the back of the Fed rate cut and is hurling the market toward an unsustainable melt-up

This will set the stage for larger risks

Here is the full playbook for navigating it: 🧵👇 Image
We have been in a melt-up with the Russell for a while now because the curve is steepening as real rates are falling. In simple terms, nominal growth remains positive and liquidity is increasing.

When real rates are falling into positive growth, risk assets fuction as a release valve and capital moves out the risk curveImage
This is why we have seen a convergence of all these factors post FOMC which I noted in the video breakdown and connected playbooks here
Read 22 tweets
Capital Flows Profile picture
Sep 16
The macro regime is confounding bears and chopping up those who think dollar devaluation is the only trend

The moves we are seeing in the dollar, gold, Bitcoin, and equities as we move through retail sales continue to reflect this

All of this is setting up for a bigger move 🧵
I laid out the logic for the macro regime and explained WHY the probability of a recession remains low. On top of this, we are seeing a massive divergence between the Fed and ECB right now.
In simple terms, retail sales showed everyone that a recession is NOT on the table right now.

MoM showed continued expansion reflecting resilience in growth as the Fed cuts rates. Image
Read 13 tweets
Capital Flows Profile picture
Sep 15
Credit Cycle Set Up For The Dollar and Risk Flows

HOW LONG can the melt up last?

Full breakdown 🧵 Image
For the last 5 months we have seen a systematic and cross asset move in the flows of capital to buy riskier assets on the far end of the risk.

The flows of capital are systematically constrained to move out the risk curve when macro liquidity rises. This is why investors are forced to buy during melt ups or else they could lose significant purchasing power in real terms if they stay on the sidelines with cash to long.
As a result, cash becomes significantly less desirable as real rates fall. Notice that this is WHY we have seen high risk sectors bid as real rates fall.

The chart below shows real rates falling since April which means less and LESS of a real return for being on the sidelines. Image
Read 15 tweets
Capital Flows Profile picture
Sep 10
The Big Bet I am taking: LONG $HYPD stock which is the Hyperliquid Treasury Company

This is the convergence of treasury company liquidity, the fastest growing crypto project (Hyperliquid), and macro liquidity moving out the risk curve as the credit cycle is in full swing

🧵👇 Image
Yesterday I laid out for paid subscribers on the website the thesis for $HYPD when we were trading in the $6-7 dollar range.

We are now in the process of melting up. The crazy thing is that we are still trading at a discount to the NAV of the token holdings.

HYPEUSD is already outperforming BTCUSD and we are now seeing $HYPD outperform $MSTR as traders move out the risk curve to oppurtunities that have more upside because they are earlier in the adoption cycle of things. Image
Read 12 tweets

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