According to the source, NYDIG’s Greg Cipollaro states Bitcoin is not an inflation hedge but a liquidity barometer that tends to perform better when the U.S. dollar weakens (source: NYDIG, Greg Cipollaro). For trading, this points to monitoring the ICE U.S. Dollar Index trend, where DXY downside aligns with more favorable BTC risk conditions per Cipollaro’s framework (sources: NYDIG; ICE U.S. Dollar Index). Traders can also track U.S. liquidity gauges such as the Federal Reserve balance sheet (H.4.1), Reverse Repo usage, and the Treasury General Account to assess dollar liquidity shifts that may influence crypto risk appetite under the NYDIG liquidity lens (sources: Federal Reserve H.4.1; Federal Reserve Overnight RRP; U.S. Treasury TGA; NYDIG).

According to PANews, NYDIG head of research Greg Cipolaro states that Bitcoin has evolved into a barometer of global liquidity, with a strengthening inverse relationship to real yields, while inflation is not the primary driver of BTC price action (source: NYDIG). NYDIG notes that traders should prioritize tracking real yields and liquidity conditions over CPI prints when assessing BTC direction, as BTC increasingly mirrors shifts in global liquidity and the level of real rates (source: NYDIG). NYDIG indicates that easing real yields and expanding liquidity are typically constructive for BTC, while rising real yields and tighter liquidity are headwinds that can pressure BTC performance (source: NYDIG).