Global Liquidity Is Surging — But Bitcoin Isn’t
Duration
10:47
Captions
1
Language
EN
Published
Sep 12, 2025
Description
Global liquidity is surging at one of the fastest rates we’ve seen in four years, but Bitcoin isn’t moving in sync. In this video, we break down how M2 growth is shaping Bitcoin’s cycles, why the old four-year halving narrative is losing relevance, and how to spot asymmetric buying opportunities using my liquidity indicators. 👉🏼 Subscribe here for my free on-chain analysis newsletter and full custom indicator suite: http://onchainmind.substack.com 📊 #Bitcoin #OnChainAnalysis #M2Liquidity #BitcoinMomentum #BitcoinAnalysis
Captions (1)
The global M2 money supply is growing at
one of the fastest paces we've seen in
the last four years with over $7
trillion added into circulation during
that period. So, while most people
obsess over price charts, there's a much
bigger force at play, and that's global
liquidity. So, in this video, we're
breaking down how this massive flood of
money is impacting Bitcoin right now,
why the old 4-year hing cycle is
becoming less relevant, and why an
asymmetric buying opportunity may be
emerging. So, let's dive in.
Now, I guarantee that when you hear most
people talk about Bitcoin, what they're
really talking about is just the price.
And that's natural. Their headlines
always revolve around whether Bitcoin is
going up, down, or just breaking through
a new level. But focusing on only price
misses half the equation because yes,
Bitcoin's supply and dynamics really do
matter. But the other side of that
equation, which is the denominator
you're measuring it against, i.e. the US
dollar, is equally just as important to
consider. Unfortunately, it's much
easier to analyze than the extremely
complex area of Bitcoin supply and
demand dynamics. Now, we all know too
well that the dollar is far from a
stable benchmark. And since the
pandemic, M2, which is basically the
broadest measure of money supply we have
available, has grown by around 42%.
Which equates to about $7 trillion added
into circulation. So when the
denominator is being inflated at that
kind of pace, it becomes impossible to
ignore that impact that it has on
Bitcoin's value in dollar terms. And
that's really the key point here. You
can't just measure Bitcoin in isolation.
You also have to measure the
everexpanding pool of cash that's
slloshing around the global financial
system. And over the past decade, we've
seen a very clear shift.
Bitcoin cycles are less and less tied to
the old 4-year hing narrative and more
and more tied to global liquidity
cycles. It's really no longer just about
how many coins are being mined. It's
about how much money is being created
and where that money is flowing to. And
that's why I think this cycle has the
potential to surprise people.
Historically, Q4 of this year would be
the classic choice for a Bitcoin peak.
We saw it in 2013, again in 2017, and
again in 2021. And yes, that pattern is
burned into trader psychology. But when
we look at the current conditions, it
doesn't feel like that we're aligned for
a true peak yet. But could it still
happen in Q4 of this year? Well, sure,
markets can always move faster than
anyone expects, but the backdrop really
doesn't suggest that a blowoff top is
imminent from where I'm sitting.
Instead, when I look at the liquidity
cycle, the very cycle the Bitcoin has
been tracking so closely for a while
now, I don't see a topping structure. I
see an expansion phase that still has
fuel left in the tank.
Now, if we zoom in on my global M2
liquidity year-over-year percentage
change chart, which is a bit of a
handful, the picture becomes very clear.
Since May, while Bitcoin's price has
been chopping sideways near its all-time
high, global liquidity hasn't slowed.
It's actually kept climbing relentlessly
and that trend matters because
historically Bitcoin reacts to liquidity
with a lag. Liquidity moves first and
then price follows. So when we see this
kind of divergence, liquidity surging
while Bitcoin stagnates, it's hard not
to feel medium-term bullish on the asset
with a backdrop that supportive. I chose
to calculate the year-on-year percentage
change because it tells us how fast this
pool of money is expanding or
contracting compared to the same point
12 months ago. And that's important
because markets don't just care about
the levels of liquidity. They care about
the rate of change. Are we adding
liquidity to the system or are we
draining it? Now, it's true that we're
not at the extreme levels of liquidity
expansion that we saw in the previous
cycle where central banks were injecting
money at an unprecedented rate. And
whether we see that kind of expansion
environment again is another question
entirely. But what we do currently have
is consistent growth. Global liquidity
has been expanding at roughly 6 to 10%
year-over-year throughout the whole of
2025.
And that might not sound dramatic, but
in the context of global markets is a
powerful force and it's one that can't
be ignored.
Now, the next tool I want to bring into
the picture is the global liquidity
momentum. The year-over-year liquidity
view is great for spotting the big
structural trend. It shows when global
money supply is generally expanding or
contracting over the past 12 months, but
it can be slow to reflect the more
immediate changes in liquidity, which
can matter a lot for short-term market
dynamics. And that's where this cyclical
momentum measure comes in. Instead of
just tracking the annual change, it
compares recent periods against each
other to see whether liquidity growth is
accelerating or slowing. Now looking at
the current setup, this indicator has
been signaling positive momentum since
April, which historically is a very long
period for uninterrupted expansion. And
in practical market terms, it means that
while Bitcoin has been chopping sideways
near its all-time high, the underlying
fuel is still building. What's
particularly interesting now is that
momentum is still trending upwards even
after several months. And that
reinforces the broader year-over-year
picture that global liquidity continues
to expand at a healthy pace and that the
market hasn't fully priced it in yet.
For me, this is a clear signal that
conditions remain supportive. It's not a
time to be defensive yet, I don't think,
but rather to watch for setups where
Bitcoin could respond to this ongoing
surge in liquidity. And historically,
stretches like this often see price
consolidation before a strong upward leg
rather than rolling over immediately.
Now, if you want to quantify how closely
Bitcoin itself is tracking these
liquidity conditions at any given point
in time, the best way is via correlation
index. And this particular one of mine
works by taking Bitcoin's year-over-year
percentage change and then comparing it
directly to the year-over-year
percentage change in Global M2. A
correlation of plus 100% means Bitcoin
is moving in perfect sync with
liquidity. and a correlation of minus
100% means that it's moving in the exact
opposite direction. So when you're
looking at this indicator, what you're
really seeing is is liquidity acting as
a tailwind or a headwind for Bitcoin.
Well, right now, as we've seen, global
liquidity is expanding at a strong pace
and momentum is positive. Yet, Bitcoin's
price action has been chopping around
sideways looking to find its footing.
This has made the correlation flip
negative and right now it's sitting at
around 31%.
What that means is that although
liquidity is surging, Bitcoin hasn't
been keeping up. And that divergence is
extremely important to pay attention to
because historically when liquidity has
been this strong and Bitcoin has
underperformed, those periods have set
up some of the best buying
opportunities. Price may lag in the
short term, but eventually the tide of
liquidity asserts itself. And when it
does, Bitcoin tends to catch up very
quickly. Let me put it this way. When
all things are equal and the liquidity
trend is clearly positive, Bitcoin
cannot stay flat for too long. This is
why I always stress the importance of
looking beyond just Bitcoin's price
chart. The price is the outcome, but
it's simply the reflection of the deeper
forces at work. And one of the most
powerful forces shaping asset prices
today is liquidity. So yes, hings and
supply reductions do matter, but the
narrative that Bitcoin's price is
strictly dictated by a 4-year cycle is
becoming weaker and weaker with every
passing year. What really matters
besides the obvious supply and demand
factors is liquidity. And right now the
liquidity backdrop looks anything but
exhausted. So overall, my take right now
is that we're in the middle of a classic
liquiditydriven expansion and that
Bitcoin just hasn't caught up yet. With
M2 still growing at one of the fastest
paces in the last 4 years and momentum
staying firmly positive since April, I
think this all-time high consolidation
phase is setting the stage for further
price growth over the medium term. And
that definitely doesn't mean that we'll
rocket straight up. The market can stay
choppy or relatively bearish in the
short term, but with this kind of
liquidity backdrop, the probability
skews heavily towards Bitcoin breaking
higher into 2026 rather than forming a
premature top here in 2025.
In other words, the fuel is there, but
the engine just hasn't fully ignited
yet.
So, to wrap things up, the big picture
here is that Bitcoin isn't just moving
because of hings anymore. What's really
driving its cycles now is liquidity. And
now that it's been adopted on an
institutional level, the flow of money
through the global financial system has
become the dominant force shaping price
action. So by understanding the
liquidity dynamics of play at any given
time gives you a much clearer lens of
what's likely to come next. And looking
at the raw numbers, Global M2 has been
expanding steadily at roughly 6 to 10%
per year on a year-over-year basis
throughout 2025.
That's a meaningful and persistent
tailwind for risk assets like Bitcoin,
even if it doesn't always feel obvious
in their day-to-day price action. And
while Bitcoin's price may be chopping
sideways or consolidating near its
all-time high, the underlying tide of
liquidity beneath the surface is still
rising. And history shows that periods
like this often lay the groundwork for
the next substantial push higher in
price once the market begins to fully
absorb the flow of money. And finally,
if you examine how Bitcoin is currently
correlating to that liquidity, there's a
very clear divergence forming. Even
though Global M2 continues to expand
strongly and momentum remains positive,
Bitcoin itself has been lagging behind.
And paradoxically, that underperformance
is actually a signal worth paying
attention to. And historically, when
liquidity is abundant, but Bitcoin
hasn't yet responded, these are the
periods that often precede sharp upward
moves as the market catches up to the
liquidity backdrop. It's a setup where
patience is rewarded because from what
we've seen today, the fuel is already
there and it looks like it's waiting to
drive the market on its next meaningful
push higher.
If you're serious about Bitcoin
analysis, my full custom indicator suite
is now live, built for investors looking
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signals and advanced onchain insights.
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Heat. Heat.