For years, one of the biggest bullish arguments for Bitcoin was its strong relationship with global liquidity.
The idea was that when central banks increased the money supply and global M2 liquidity expanded, Bitcoin usually moved higher as well. From 2013 through mid-2025, Bitcoin and global liquidity showed an extremely strong correlation, becoming one of the most widely followed macro indicators in crypto. But that relationship has recently weakened.
Global M2 liquidity has now climbed to record highs above $100 trillion. In previous cycles, that kind of liquidity expansion would likely have pushed Bitcoin toward new all-time highs.
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Instead, Bitcoin remains near the $77,000 range after previously trading above $100,000 during the late-2025 rally.
The divergence has raised questions about whether Bitcoin’s market structure has changed.
One major explanation is the rise of spot Bitcoin ETFs. Bitcoin is now increasingly influenced by institutional capital flows instead of only reacting to global liquidity conditions. ETF inflows, Treasury yields, dollar strength, and broader macroeconomic positioning are playing a larger role in price movements.
This is very different from earlier cycles when retail participation and liquidity expansion were the main drivers behind Bitcoin rallies.
Global uncertainty has also affected market behavior. Ongoing geopolitical tensions, high energy prices, and cautious risk sentiment across financial markets have reduced aggressive buying activity in crypto despite liquidity continuing to expand globally.
As a result, Bitcoin has not responded to rising liquidity the same way it did in previous cycles.
(adsbygoogle = window.adsbygoogle || []).push({});Some investors still believe Bitcoin could eventually catch up if liquidity conditions remain strong and market sentiment improves. Others believe this cycle has already shown that the old “money printing equals Bitcoin up” theory is no longer as reliable as before.
What remains clear is that Bitcoin’s relationship with global liquidity is no longer moving in the simple and predictable way many investors became used to over the last decade.
