Key Takeaways
Bitcoin has historically responded to positive economic shifts, such as Donald Trump’s election victory. Now, BRICS’ growing liquidity could boost Bitcoin as well.
The crypto market has held relatively stable in recent days, with total market capitalization at $3.8 trillion at press time.
Bitcoin [BTC] has also maintained a positive outlook, with a market capitalization of $2.21 trillion. Shifting global market dynamics and rising liquidity could provide further support for the asset.
AMBCrypto’s analysis examines how Bitcoin may benefit from these developments.
Liquidity rise in BRICS could support Bitcoin
Liquidity expansion is growing among the BRICS nations (including Brazil, Russia, India, China, South Africa, and others) according to a recent report by Alphracatal.
The report, which tracks monetary base and bank liquidity, shows rising liquidity levels and points to the development of a “new economic axis.”
Growth in international and domestic trade has played a key role in this expansion and signals a gradual move away from the U.S. dollar, the world’s dominant reserve currency.
Source: Alphractal
A comparison of the BRICS monetary base with Bitcoin’s price shows a positive correlation. Rising liquidity has consistently aligned with upward Bitcoin movements.
With broader liquidity growth in global markets, Bitcoin is likely to continue moving in tandem.
Brazil, China could fuel demand
Developments in Brazil and China have further supported digital asset adoption over the past month.
In Brazil, the government is considering a Bitcoin reserve, known as RESBit, with plans to allocate 5% of its budget—approximately $19 billion—to the asset.
Meanwhile, China, despite its 2021 cryptocurrency ban, has begun exploring a yuan-backed stablecoin to position its currency for global adoption.
The approval of Brazil’s RESBit could mark a significant moment for Bitcoin, drawing more liquidity into the market and encouraging wider adoption within BRICS. A similar move from China could carry equal weight.
Source: TradingView
Global economic events have historically influenced Bitcoin’s price. Following Donald Trump’s victory in the November 2024 U.S. election, Bitcoin rallied sharply, reaching a new all-time high.
According to TradingView, Bitcoin gained over 66% from the 5th of November to December 2024, climbing to $108,000.
Outperforming global markets
On a global scale, the asset has consistently outperformed traditional markets. Data from Artemis shows Bitcoin’s year-to-date gains at 103%, compared to 32% for the S&P 500.
Source: Bitcoin vs. S&P500
This growth has also reflected in trading activity. Global exchanges such as Binance reported trading volumes of $700 trillion, surpassing the estimated value of global real estate.
These figures confirm the accelerating trend of Bitcoin adoption worldwide.
One notable metric to monitor is the Bitcoin Reserve held on exchanges. Although in a downtrend, this suggests more investors are moving assets to private wallets, typically associated with long-term holding strategies.
At present, the Reserves stand at 2.4 million according to CryptoQuant. A continued decline would indicate deeper adoption and reduced sell-side pressure in the market.