Do you think it's reasonable? 🧐
Liquidity is essentially driven by incentives, so it moves reactively to a very simple question:
"Where do I have the highest upside with the lowest risk?"
At each stage of the cycle, the answer is different.
🟡 Beginning of the cycle = Safe
⚪️ Middle of the cycle = Efficient
🟢 End of the cycle = Speculative
When yields at the peak of the chain begin to compress — as is currently happening with Gold and Silver — then cash flow must shift downwards to maintain profitability.
It's not that investors suddenly become stupid or more reckless, but because the risk remains almost unchanged while the upside gets smaller and smaller.
This forces capital to seek other places, and naturally, it will flow into smaller-cap assets, where the same amount of liquidity can create larger price fluctuations.
Gold → Silver → Bitcoin → ETH & large-cap → mid-cap → small-cap → meme & some random stuff
Yield compression forces cash flow to seek efficiency, not because people want to accept more risk.
And therefore, narratives only form after the cash flow has shifted.
🟡 "Gold rises because people lose faith in fiat currency"
⚪️ "Silver rises due to global supply shortages"
🟠 "Bitcoin rises because it is a better version of gold"
…and many other stories.
In essence, it is just the same liquidity being reused, flowing through different markets and creating new narratives.
Cash flow:
• into Gold → out of Gold
• into Silver → out of Silver
• into Bitcoin → out of Bitcoin
• into Altcoin → out of Altcoin
$BTC
Liquidity is essentially driven by incentives, so it moves reactively to a very simple question:
"Where do I have the highest upside with the lowest risk?"
At each stage of the cycle, the answer is different.
🟡 Beginning of the cycle = Safe
⚪️ Middle of the cycle = Efficient
🟢 End of the cycle = Speculative
When yields at the peak of the chain begin to compress — as is currently happening with Gold and Silver — then cash flow must shift downwards to maintain profitability.
It's not that investors suddenly become stupid or more reckless, but because the risk remains almost unchanged while the upside gets smaller and smaller.
This forces capital to seek other places, and naturally, it will flow into smaller-cap assets, where the same amount of liquidity can create larger price fluctuations.
Gold → Silver → Bitcoin → ETH & large-cap → mid-cap → small-cap → meme & some random stuff
Yield compression forces cash flow to seek efficiency, not because people want to accept more risk.
And therefore, narratives only form after the cash flow has shifted.
🟡 "Gold rises because people lose faith in fiat currency"
⚪️ "Silver rises due to global supply shortages"
🟠 "Bitcoin rises because it is a better version of gold"
…and many other stories.
In essence, it is just the same liquidity being reused, flowing through different markets and creating new narratives.
Cash flow:
• into Gold → out of Gold
• into Silver → out of Silver
• into Bitcoin → out of Bitcoin
• into Altcoin → out of Altcoin
$BTC