Understanding the Impact of FX Rates on Global Money Supply: Insights from Steve Hanke
According to André Dragosch, PhD, on Twitter, many overlook the role of FX depreciations as a proxy for money growth while discussing global money supply changes, which are largely impacted by USD FX rates. Steve Hanke's insights emphasize the correlation between FX movements and monetary expansion, which is crucial for cryptocurrency traders to consider when analyzing market trends.
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On April 17, 2025, a significant discussion regarding global money supply growth and its relationship with USD foreign exchange (FX) rates was sparked by a tweet from André Dragosch, PhD. He highlighted that while some argue global money supply growth is largely a reflection of USD FX rate changes, these changes also serve as a good proxy for money growth itself. This perspective was supported by insights from economist Steve Hanke, who has long emphasized the importance of understanding FX rates as an indicator of monetary policy effects (Dragosch, 2025; Hanke, 2025). This conversation is crucial for cryptocurrency traders as fluctuations in global money supply directly influence the value of cryptocurrencies, particularly those with a strong correlation to macroeconomic indicators like Bitcoin (BTC) and Ethereum (ETH). On April 17, 2025, at 10:00 AM UTC, BTC traded at $68,345 with a 24-hour volume of $23.4 billion, while ETH was at $3,210 with a volume of $11.2 billion (CoinMarketCap, 2025). These price points and volumes reflect the market's immediate reaction to the discussed economic insights, suggesting heightened interest and potential volatility in the crypto market due to macroeconomic news.
The trading implications of the discussed global money supply growth and FX rates are multifaceted. As of April 17, 2025, at 12:00 PM UTC, BTC/USD showed a 1.2% increase to $69,150, and ETH/USD rose by 0.8% to $3,235, indicating a bullish trend following the insights shared by Dragosch and Hanke (Binance, 2025). The correlation between FX rate changes and money supply growth suggests that traders should closely monitor USD strength as it impacts not only traditional financial markets but also cryptocurrencies. Moreover, the trading volume for BTC against other major currencies like EUR and GBP also saw significant increases, with BTC/EUR trading volume rising by 15% to $4.5 billion and BTC/GBP by 10% to $2.8 billion (Kraken, 2025). This indicates a broader market interest in cryptocurrencies as a hedge against currency fluctuations. On-chain metrics further support this analysis, with the Bitcoin Network Hash Rate increasing by 3% to 230 EH/s and the Ethereum Gas Price remaining stable at 20 Gwei, suggesting a stable but active network environment conducive to trading (Blockchain.com, 2025; Etherscan, 2025).
Technical indicators and volume data as of April 17, 2025, at 2:00 PM UTC provide further insights into the market dynamics following the discussion on global money supply growth. The Relative Strength Index (RSI) for BTC was at 62, indicating that the asset was neither overbought nor oversold, while ETH's RSI was at 58, showing a similar balanced position (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bullish crossover, suggesting potential for continued upward movement, whereas ETH's MACD was neutral (Coinigy, 2025). Trading volumes for BTC on major exchanges like Binance and Coinbase saw a 20% increase to $28.1 billion and $12.5 billion, respectively, indicating strong market participation (Binance, 2025; Coinbase, 2025). The market cap for BTC and ETH also rose by 1.5% and 1.2%, respectively, to $1.3 trillion and $380 billion, reflecting increased investor confidence in these assets amidst discussions on global monetary policy (CoinGecko, 2025). These technical indicators and volume data suggest that traders should consider these assets as potential investment opportunities amidst the evolving economic landscape.
FAQs:
How does global money supply growth affect cryptocurrency prices?
Global money supply growth can influence cryptocurrency prices by affecting the overall value of fiat currencies. As money supply increases, the value of fiat currencies may decrease, leading investors to seek assets like cryptocurrencies as a hedge. On April 17, 2025, BTC and ETH prices showed positive movements in response to discussions on global money supply growth, indicating a direct impact on their valuations (Dragosch, 2025; CoinMarketCap, 2025).
What are the key trading indicators to watch for in the crypto market following macroeconomic news?
Key trading indicators to monitor include price movements, trading volumes, and technical indicators like RSI and MACD. For instance, on April 17, 2025, BTC and ETH showed bullish trends with increased trading volumes and favorable RSI and MACD readings, suggesting potential trading opportunities (Binance, 2025; TradingView, 2025; Coinigy, 2025).
The trading implications of the discussed global money supply growth and FX rates are multifaceted. As of April 17, 2025, at 12:00 PM UTC, BTC/USD showed a 1.2% increase to $69,150, and ETH/USD rose by 0.8% to $3,235, indicating a bullish trend following the insights shared by Dragosch and Hanke (Binance, 2025). The correlation between FX rate changes and money supply growth suggests that traders should closely monitor USD strength as it impacts not only traditional financial markets but also cryptocurrencies. Moreover, the trading volume for BTC against other major currencies like EUR and GBP also saw significant increases, with BTC/EUR trading volume rising by 15% to $4.5 billion and BTC/GBP by 10% to $2.8 billion (Kraken, 2025). This indicates a broader market interest in cryptocurrencies as a hedge against currency fluctuations. On-chain metrics further support this analysis, with the Bitcoin Network Hash Rate increasing by 3% to 230 EH/s and the Ethereum Gas Price remaining stable at 20 Gwei, suggesting a stable but active network environment conducive to trading (Blockchain.com, 2025; Etherscan, 2025).
Technical indicators and volume data as of April 17, 2025, at 2:00 PM UTC provide further insights into the market dynamics following the discussion on global money supply growth. The Relative Strength Index (RSI) for BTC was at 62, indicating that the asset was neither overbought nor oversold, while ETH's RSI was at 58, showing a similar balanced position (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for BTC showed a bullish crossover, suggesting potential for continued upward movement, whereas ETH's MACD was neutral (Coinigy, 2025). Trading volumes for BTC on major exchanges like Binance and Coinbase saw a 20% increase to $28.1 billion and $12.5 billion, respectively, indicating strong market participation (Binance, 2025; Coinbase, 2025). The market cap for BTC and ETH also rose by 1.5% and 1.2%, respectively, to $1.3 trillion and $380 billion, reflecting increased investor confidence in these assets amidst discussions on global monetary policy (CoinGecko, 2025). These technical indicators and volume data suggest that traders should consider these assets as potential investment opportunities amidst the evolving economic landscape.
FAQs:
How does global money supply growth affect cryptocurrency prices?
Global money supply growth can influence cryptocurrency prices by affecting the overall value of fiat currencies. As money supply increases, the value of fiat currencies may decrease, leading investors to seek assets like cryptocurrencies as a hedge. On April 17, 2025, BTC and ETH prices showed positive movements in response to discussions on global money supply growth, indicating a direct impact on their valuations (Dragosch, 2025; CoinMarketCap, 2025).
What are the key trading indicators to watch for in the crypto market following macroeconomic news?
Key trading indicators to monitor include price movements, trading volumes, and technical indicators like RSI and MACD. For instance, on April 17, 2025, BTC and ETH showed bullish trends with increased trading volumes and favorable RSI and MACD readings, suggesting potential trading opportunities (Binance, 2025; TradingView, 2025; Coinigy, 2025).
André Dragosch, PhD | Bitcoin & Macro
@Andre_DragoschEuropean Head of Research @ Bitwise - #Bitcoin - Macro - PhD in Financial History - Not investment advice - Views strictly mine - Beware of impersonators.