The liquidity rise of BRICS countries may become a new driving force for Bitcoin, challenging the status of the US dollar.

Historically, Bitcoin (BTC) tends to respond to positive macroeconomic changes, such as after Donald Trump’s victory in the 2024 U.S. election, Bitcoin soared to $100,000. Now, with the rising liquidity of the BRICS countries (Brazil, Russia, India, China, South Africa, etc.), Bitcoin may gain new support. This trend indicates a shift in global market dynamics and suggests the formation of a "new economic axis."

The Rise of Liquidity in BRICS and Its Association with Bitcoin

(Source: Alphractal)

According to the latest report from Alphracatal, the monetary base and bank liquidity of BRICS countries are expanding, largely due to the rise in international and domestic trade. The report indicates that this expansion suggests that the world is gradually freeing itself from dependence on the US dollar as the dominant global reserve currency.

The report found a positive correlation between the rise in the monetary base of BRICS countries and the increase in Bitcoin prices. When liquidity rises, the price of Bitcoin also increases. With the continued growth of liquidity in global markets, Bitcoin is likely to maintain upward momentum.

Resonance between Major Global Economies' Policies and Bitcoin

Recent developments in the digital asset space by some major economies further strengthen the bullish outlook for Bitcoin:

• Brazil: The Brazilian government is considering establishing a Bitcoin reserve called RESBit, planning to allocate 5% of the national budget (approximately $19 billion) to this asset. If approved, this initiative will be an important milestone for Bitcoin, bringing more liquidity to the market and encouraging widespread adoption among BRICS countries.
• China: Despite implementing a cryptocurrency ban in 2021, China has begun exploring the issuance of a stablecoin backed by the Renminbi to promote the global application of its currency. This move has a market impact equivalent to that of Brazil's actions.

The article also reviews Bitcoin's historic performance after the 2024 U.S. presidential election. After Donald Trump won, Bitcoin soared over 66% from November to December 2024, reaching a price of 108,000 USD, setting a new all-time high.

(Source: TradingView)

Bitcoin Outperforms Traditional Markets, On-Chain Indicators Release Bullish Signals

In a broader global context, Bitcoin continues to outperform traditional markets. According to data from Artemis, Bitcoin's year-to-date return rate has reached 103%, while the S&P 500 index has a return rate of 32%. This rise is also reflected in global trading activities, with the trading volume of major cryptocurrency exchanges reaching trillions of dollars, surpassing the estimated total value of global real estate.

One on-chain metric worth noting is the Bitcoin reserves held by exchanges. This reserve amount is on a downward trend, which is typically seen as a bullish signal. According to CryptoQuant data, the current reserve amount is 2.4 million coins. The ongoing decrease in reserves means that more and more investors are moving their assets to personal wallets for long-term holding, thereby reducing the selling pressure in the market.

Conclusion

The rising liquidity of BRICS nations, key countries' active exploration of digital assets, and Bitcoin's outstanding performance in the market collectively provide strong support for its robust growth in the future. This indicates that Bitcoin's success is no longer limited to Western markets, but is increasingly benefiting from the diversification of global macroeconomic forces, further solidifying its status as a global macro asset.