This simple chart, made by Apollo Global Management economist Torsten Slok, presents a straightforward correlation. It suggests that Bitcoin’s success is driven by the hunt for yield associated with the Federal Reserve’s money printing, along with that of other central banks.
The usual caveats apply: correlation isn’t causation; predictions are hard, especially about the future; etc.
But if this correlation holds up, then the outlook for Bitcoin is weak because the Fed is set to eliminate long-term asset purchases this quarter (hopefully this month, but that’s another post) and reduce this size of its balance sheet this calendar year.