Bitcoin’s Silent Response to a Global Liquidity Surge
As global liquidity soars to unprecedented levels in 2026—estimated at around $123-$130 trillion—Bitcoin (BTC) has taken a cautious approach. This stark contrast to traditional hedges like gold and silver, which have seen gains of 70% and 150% respectively, raises crucial questions about BTC’s delayed reaction to the influx of liquidity.
The Role of China’s M2 Expansion
China’s consistent M2 money supply expansion drove much of the global liquidity boom. From 2024 to 2026, China’s M2 grew from approximately 45 trillion to 49 trillion, maintaining annual growth rates of 8–8.5%. However, this expansion was characterized by stability rather than growth fueled by aggressive stimulus policies.
While Bitcoin prices rallied during this period, the connection between liquidity injection and price movement grew increasingly weaker after mid-2025. Prices started responding more to market risk appetite and institutional positioning rather than immediate liquidity factors.
Investors Remain Patient
Despite BTC’s underperformance relative to traditional assets, market participants remain optimistic. Historically, increased global liquidity has acted as a tailwind for crypto markets, suggesting potential for a long-term upward trajectory.
By mid-2025, spot flow data from CoinGlass indicated strong positive trends, with recurring inflows exceeding $300 million as BTC prices approached the $120,000-$130,000 range. However, late 2025 ushered in volatility, with daily outflows occasionally surpassing $800 million, causing Bitcoin to drop below $100,000. These fluctuations reflect ongoing market sentiment swings and risk adjustments.
What’s Next for Bitcoin?
The structural presence of liquidity remains a long-term catalyst for Bitcoin. Yet, short-term price movements will likely hinge on macroeconomic conditions, institutional behavior, and risk sentiment.
If you’re planning to enter the crypto space, maintaining a diversified portfolio is key. With market volatility expected to continue, investors might consider tools like the Ledger Nano X for secure crypto storage and long-term positioning.
