Liquidity Surge Sets Stage for Potential Bitcoin Rally

Global liquidity has reached an all-time high of $103.66 trillion, with the combined money supply of the Federal Reserve, European Central Bank, Bank of Japan, and People's Bank of China increasing by over $1 trillion in August alone.

This surge in liquidity is linked to sustained monetary expansion, according to Bull Theory, which suggests that more money printed means more money flowing into assets like stocks, gold, and Bitcoin (BTC).

Prominent Bitcoin advocates such as Anthony Pompliano and Arthur Hayes have long maintained that the cryptocurrency's growth depends on an increase in the money supply.

However, despite rising liquidity, Bitcoin prices have fallen in the 2025-2026 bear market. VanEck Head of Digital Assets Research Matthew Sigel attributed this to a lag between changes in liquidity and Bitcoin's price movement.