Darius sat down with Anthony Pompliano last week to discuss the Bitcoin ETF, global liquidity, and more.

If you missed the interview, here are three takeaways from the conversation that have significant implications for your portfolio: 

1. Our Wall Street Clients Are Closely Watching The BTC ETF Approval

BTC’s price appreciation throughout 2023 has fueled the excitement among Portfolio Managers and RIAs.

Generally, reception from our institutional clients for the BTC ETF has been warm, and we expect BTC to perform well over the long term as a result.

2. Favorable Market Conditions And An Increase In Tax Efficiency Support Flows to BTC

Many institutional investors have avoided BTC due to the complexities of tax reporting. 

An ETF is a tax-efficient investment vehicle, so we expect it will increase inflows into the asset class.

With a vast multi-trillion dollar pool in investment advisory allocations, we believe there will be a shift at the margins from traditional alternative investments like gold, commodities, and real estate towards BTC. 

Additionally, we believe the current GOLDILOCKS regime will support inflows into the asset class over the short term. 

3. We Expect Global Liquidity to Continue Increasing Over The Medium Term

Over the past two quarters, our 42 Macro Net Liquidity model, which is calculated by taking the Federal Reserve Balance Sheet and subtracting the Treasury General Account (TGA) Balance and the Reverse Repo Program (RRP) Balance, has maintained an upward trend.

Similarly, our 42 Macro Global Liquidity Proxy, which is derived by summing the Global Central Bank Balance Sheet, Global Broad Money Supply, and Global Foreign Exchange Reserves ex-Gold, has also shown an upward trend in the past few quarters. 

This model is particularly significant for projecting asset market performance. 

In addition, there are a number of leading indicators that support robust private-sector liquidity creation. 

Based on these factors, we anticipate a continued increase in liquidity over the medium term.

That’s a wrap! 

If you found this blog post helpful:

1. Go to www.42macro.com to unlock actionable, hedge-fund-caliber investment insights.

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3. Have a great day!