Analyst: 'China money' driving global liquidity, explains BTC dip

The recent increase in global liquidity is largely driven by China, which explains why gold has been rising while Bitcoin has seen a correction, according to Chris Tipper, an analyst at the Australian-based crypto investment firm Ainslie Wealth. In a post on X, Tipper noted that while global liquidity stands at around $190 trillion, the People's Bank of China (PBoC) has been the primary contributor to its recent growth. The PBoC is expected to inject a similar amount of liquidity this year as the $1 trillion it supplied in 2023. However, due to the ban on BTC and cryptocurrency investments in China, this capital has flowed into gold and other real-world assets (RWA). Tipper argued that Bitcoin's recent decline is not due to a breakdown in its correlation with global liquidity, but rather a shift in the composition of that liquidity. He predicted that BTC will enter a recovery phase once Western liquidity momentum accelerates, driven by factors such as market intervention by the U.S. Federal Reserve or a weaker dollar.