Title June 14 2025 What Drives Bitcoin- Money Or Liquidity?.pdf ✅

World M2 money supply is a better statistic, but it also falls short. Admittedly, it is straightforward to calculate, but the bane of economics is often that concepts that are the most easily measured take on the greatest importance, regardless of their doubtful efficacy. This ‘measurement without theory’ applies here. According to Henry Kaufman, ex-Salomon Brothers research chief and one of the most influential American monetary economists in the last half century: “Money matters, but credit counts.” In other words, looking at the assets or credit side of the financial system gives insight into the dynamics of money. While similarly insisting on a credit view, we go a step further to bring Kaufman’s insights up-to-date by acknowledging, first, that liquidity can be created outside of traditional banks, via repo markets and shadow banks, and, second, that since liquidity is fungible, we need to embrace an international perspective. Hence, ‘Global Liquidity’. To summarize, Global Liquidity focuses on: (1) Credit, not money (2) Global, not national