COPPERBullish
1w ago
Understanding The Commodity Boom
Liquidity shifting into the real economy should keep copper and commodities outperforming in a late-cycle boom.
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Cite asCryptoQuant has tracked 22 directional calls by @capitalwars on Substack: tracked, not yet ranked (below the accuracy-scoring baseline) (as of Oct 6, 2026).
Understanding The Commodity Boom
Liquidity shifting into the real economy should keep copper and commodities outperforming in a late-cycle boom.
View original →China, Gold And Crypto
Monetary debasement favors holding a volatility-weighted gold-Bitcoin basket, which appears to be breaking its downtrend
View original →Bitcoin’s Liquidity Paradoxes
Could More ‘Treasury QE’ Explain Bitcoin’s Recent Rebound? We view liquidity as circulating through two distinct channels: the financial economy and the real economy. We often express this idea by saying that all money that is anywhere must be somewhere ; it cannot occupy two places simultaneously. In broad terms, liquidity in the financial sector supports bond prices and risk assets, while liquidity in the real economy fuels commodity markets, business activity and corporate profits. When liquidity shifts between these two circuits, equity P/Es may fall as bond yields rise, but stronger earnings can offset that pressure to a greater or lesser degree. This paper advances a three-part argument. First, it distinguishes between financial-market liquidity and real-economy liquidity. Second, it examines how Treasury QE increasingly channels liquidity into the real economy rather than through the Federal Reserve’s balance sheet. Third, it assesses whether Bitcoin behaves more like a real asset than a purely financial one by comparing its price dynamics with Treasury QE, Global Liquidity and PBoC Liquidity? Subscribe now Put another way, asset allocation depends on choices between financial and real assets. The commodity/bond split is the simplest example. Indeed, their negative correlation was part of the logic behind the ultimately ill-fated 1981 merger that created Phibro-Salomon , a large American financial and commodities powerhouse combining Phibro Corporation (Philipp Brothers), then the world’s largest commodities trading firm, with Salomon Brothers , the bond kings of Wall Street. The asymmetry soon became clear: Salomon benefited from the 1980s financial boom, while Phibro suffered through the commodity slump. The key question is whether cryptocurrencies and precious metals should be viewed primarily as real assets or financial assets? We have long argued that they belong largely to the financial sphere. However, recent data suggest a more nuanced interpretation. The chart below suggests that Bitcoin is currently trying to find a floor. Could this get further support from the buoyant US real economy? [The grey shaded areas denote periods where the 50d MA is below the 200d MA.] We already know that there exists a solid correlation between Global Liquidity, that is funds circulating through the financial sphere, and cryptocurrencies. Below, we reproduce the relationship between a basket of cryptocurrencies (BES$: 60% BTC$, 30% ETH$ and 10% SOL$) and Global Liquidity. This chart is shown weekly, using 6-week changes to eliminate ‘noise’ and with Global Liquidity advanced by 3 months. Treasury QE Treasury QE is a useful extra dimension in order to test whether there is also an additional link to the real economy. We use the term Treasury QE to describe policies that alter the composition and maturity structure of outstanding government debt in a way that supports liquidity and economic activity without requiring a direct expansion of the Federal Reserve’s balance sheet. Put simply, Fed QE expands and alters the composition of the Federal Reserve’s balance sheet, whereas Treasury QE changes the composition and maturity profile of outstanding government debt. The former injects money into financial markets, whereas the latter is a direct injection into the real economy through government procurement and other spending. The following chart illustrates the recent shift from Fed QE to Treasury QE. Our calculations use the approximation that liquidity is proportional to net assets divided by duration. The data indicate the recent dominance of Treasury QE and a growing role for State spending financed through Treasury bill issuance. Consider alongside the relatively weak relationship between changes in gold prices (a financial asset) and Treasury QE. This is consistent with our view that bullion prices are influenced primarily by Asian demand and, in particular, by liquidity conditions associated with the People’s Bank of Ch
View original →Global Liquidity Check
Long-term bullish Bitcoin as inflation hedge, though rising bond yields may temporarily hurt.
View original →Bitcoin Liquidity
Early-stage adoption supports Bitcoin long term, but timing should follow trusted-liquidity momentum.
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