Bitcoin Ties Global Liquidity Trends as AI Capex Growth Faces Slowdown

Bitcoin's price movements are increasingly seen as an indicator of global liquidity, according to economist Fu Peng. He argues that Bitcoin has evolved from a speculative asset into a standard financial asset whose price reflects changes in global liquidity, funding costs, and investor risk appetite.

Fu notes that unlike company shares, Bitcoin's valuation cannot be derived from quarterly earnings or future cash-flow projections. Its fixed issuance schedule also does not adjust to short-term changes in demand. As such, BTC is sensitive to the marginal availability of capital and can absorb changing financial conditions quickly.

Bitcoin's price can weaken before slower economic indicators or corporate results reveal the same deterioration when real interest rates rise, the US dollar strengthens, borrowing becomes more expensive, or institutions reduce exposure to volatile assets. Conversely, expectations of easier monetary policy, improving credit conditions, or renewed institutional inflows can support BTC before those shifts appear clearly in conventional data.

The relationship between Bitcoin and global liquidity is not a one-way street. Research by Lyn Alden Investment Strategy found that Bitcoin moved in the same direction as global liquidity during approximately 83% of 12-month periods and 74% of six-month periods. However, the direction of causality depends on the measure and time frame being studied.

Meanwhile, the AI spending boom is facing a slowdown due to rising costs putting pressure on free cash flow. Big Tech companies are investing heavily in data centers, chips, power, and cloud infrastructure, but may need to use external lenders or specialized funding arrangements to maintain construction pace. This could lead to higher capital costs and change how shareholders evaluate AI strategies.