Money Velocity and Economic Activity in the US Market

Money Velocity and Economic Activity in the US Market

There is too much money to spend. This will help BTC (Bitcoin) reach its next phase of massive increases. That is what analysts believe.

Jeroen Blokland is a portfolio manager at asset manager Robeco. In a blog post on August twenty-fifth, he noted that the United States M2 money velocity had hit historic lows.

Velocity measures the speed at which money circulates the economy. 2020 has seen a crash in this metric.

Blokland wrote that, theoretically, the velocity of money rises when economic activity increases.

Federal Reserve were the most prominent when it came to printing money. This has characterized the period since March. This was when coronavirus sparked a cross-asset market crash.

The rise in safe have assets – silver, Bitcoin, gold – in G4 nations have come in tandem with rising central bank balance sheets. That is what Cointelegraph reported.


PlanB is the quant analyst behind Bitcoin’s stock-to-flow price forecasting models. So PlanB, with the collapse in money velocity, will only serve to accelerate the most significant cryptocurrency on its way to recent predictions. The latest forecast was an average of $288,000 by 2024.

The S2FX (stock-to-flow cross-asset model) delivers multiple “phases” of bitcoin as an asset. The $288,00 price point forms part of phase five.

PlanB tweeted in March about S2FX, saying that $288k is the cluster center (S2F-market value centroid) of the next phase. Similarly, the $6700 was the cluster of last and current phase. PlanB made this comment on an explanatory chart.

Blokland has given a warning concerning the impact of low velocity on financial policy. The Federal Reserve, this week, is widely tipped to announce plans to raise its target of inflation to up to 4%.

He added that the low velocity of money means that even more money is needed to create inflation. However, that only resulted in asset price inflation.

Also, he said that, don’t yet know precisely when phase five will start and end.

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