Altcoins News

Story: Bitcoin Drops $66,000 Below M2 Fair Value as Liquidity Crunch Hits Market

By Dan Saada

1 / 15

Liquidity Problems Mount. Market watchers think liquidity constraints are the main culprit.

2 / 15

Data Shows Declining Activity. Glassnode dropped a report on March 18 showing active Bitcoin addresses are falling.

3 / 15

Exchange Leaders Speak Up. Binance's Changpeng Zhao talked about liquidity at a crypto conference March 21.

4 / 15

Bitcoin's trading at a brutal $66,000 discount to its M2 money supply fair value, and traders are getting nervous about what's really going on behind the scenes.

5 / 15

The numbers don't lie here. Bitcoin sits around $24,000 while analysts peg the M2 fair value at roughly $90,000.

6 / 15

Market watchers think liquidity constraints are the main culprit. Bitcoin can't seem to climb toward that theoretical fair value, even when other markets rally.

7 / 15

Jamie Reynolds, who tracks crypto markets for a living, said the price gap "suggests underlying liquidity issues" that aren't going away anytime soon.

8 / 15

Interest rate hikes keep hammering crypto. The Federal Reserve left rates unchanged on March 15 but signaled more hikes could come later.

9 / 15

Coinbase reported trading volumes dropped hard over the past month. Emily Parker, speaking for the exchange, said "We've seen a noticeable drop in activity" as traders get…

10 / 15

Glassnode dropped a report on March 18 showing active Bitcoin addresses are falling. Fewer people are actually using Bitcoin day-to-day, which usually means less market activity…

11 / 15

But some big names aren't backing down. Cathie Wood from ARK Invest doubled down on her Bitcoin bet March 19, calling the current price a "buying opportunity" for anyone thinking…

12 / 15

Michael Saylor keeps buying too. MicroStrategy grabbed another 1,000 Bitcoins on March 20 at an average price of $24,500 per coin.

13 / 15

Meanwhile, Bitcoin's hash rate hit new highs according to Blockchain.com data. The network's computational power topped 200 exahashes per second on March 19.

14 / 15

Senator Cynthia Lummis came out swinging for Bitcoin again on March 18. She keeps pushing the inflation hedge narrative and wants regulatory clarity for the whole crypto sector.

15 / 15

The European Central Bank hasn't said much about Bitcoin's price problems. No formal statements, no policy hints, nothing.

The Currency Analytics

Want the full story?