Global Liquidity

Study Notes

Raoul Pal, CEO of Real Vision, discusses the impact of global liquidity on asset prices.
The GMI Global liquidity index, which combines G5 central bank balance sheets and money supply, is a key driver of asset prices.
The correlation between liquidity and asset prices is 97%.
The US has been more cautious in regulating cryptocurrencies compared to the UK, which has taken a permissive approach.
Regulatory arbitrage, taking advantage of regulatory differences between jurisdictions, may lead to more crypto firms setting up operations in the UK.
The UK has a history of regulatory arbitrage, capturing markets when the US stumbles in financial markets.
The UK's financial system, democracy, English language, and trade linkages make it an attractive location for businesses.
The UK has captured the foreign exchange market, the euro dollar market, and the derivative market outside of the futures market.
The US may be driving away innovation by not providing clear guidance on crypto regulations.
The global markets are being driven by a combination of factors, including supply chain pressures and inflation data.
London was the center of the global financial market, but lost relevancy due to Brexit and other factors.
The crypto industry is now worth trillions of dollars and is projected to grow.
Coinbase CEO Brian Armstrong indicated that the exchange may consider moving away from the US if regulatory clarity is not achieved.
Bittrex also plans to exit the US due to regulatory and economic environment.
The UK has one regulator, the FCA, responsible for both commodities and securities, while the US has separate bodies.
Armstrong wants a clear rule book for the industry.
Coinbase received a Wells notice from the SEC in March.
Armstrong believes that exchanges like Coinbase should be regulated like financial services companies, while decentralized areas of the industry should be handled differently.
The lack of regulatory clarity in the US may lead to companies investing more elsewhere in the world.
The impact of this on cryptocurrencies in the US is uncertain.

Description

Test your knowledge on the impact of global liquidity, regulatory arbitrage, and the cryptocurrency industry with this informative quiz. Learn about the correlation between liquidity and asset prices, why the UK may be a more attractive location for crypto firms, and the lack of regulatory clarity in the US. See if you can answer questions on topics such as the GMI Global liquidity index, the regulatory differences between the US and UK, and the potential consequences for the crypto industry. Challenge yourself and expand your understanding of these important