Bitcoin has gained 7% in the past five days, breaking through $64,000 for the first time since August 26. Meanwhile, gold has hit a record high more than 30 times this year, breaking through $2,600 an ounce. Analyst James Van Straten said that the outstanding performance of Bitcoin and gold is related to the increase in global liquidity, the expansion of global central bank balance sheets, and the recent interest rate cuts by the Federal Reserve to stimulate investment and economic activity. The Fed's balance sheet currently stands at $7.1 trillion, and although quantitative tightening is still ongoing, the pace has slowed. The reduction in reverse repo balances, which currently stand at just over $300 billion, has released liquidity back into the financial system. This has a stimulating effect, increasing the availability of funds for lending, investment, and overall economic activity. From a broader perspective, the global recovery of central bank balance sheets has risen from about $30 trillion since July. This increase in liquidity has been particularly stimulating for Bitcoin. In addition to this, the Fed's 50 basis point interest rate cut has further supported the rise of Bitcoin and gold. (Coindesk)
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