Global liquidity will rise to record highs in 2026, reaching approximately $123-130 trillion.
This boost was mainly due to accelerating M2 expansion in China. Bitcoins though [BTC] continues to lag behind gold and silver.
The difference does not imply weakness, but a potential delay in Bitcoin’s liquidity response.
Macro conditions became stable and risk appetite gradually began to recover as liquidity recovered. But first the capital went into traditional hedges.
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Gold gained almost 70% and silver gained about 150%. In contrast, Bitcoin underperformed, dropping around 6-7%, but this does not indicate poor performance.
Traditionally, higher beta positions are repriced more aggressively after these phases. Investors continue to show patience and optimism.
In the short term, reactions may remain muted. In the long term, however, increased liquidity has been a constant driver of crypto upside.
The Chinese M2 is quietly supporting Bitcoin’s upside
Between 2024 and 2025, China’s M2 increased steadily from about 45 trillion to 48 trillion, with annual growth grow controlled at 8 to 8.5% until December 2025.
This rate indicated stability rather than growth due to stimulus measures. In 2026, M2 was about 49 trillion, continuing the same structural trend.
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Bitcoin’s price improved during this period, although there was a weakening of the connection.
After mid-2025, price action was more independent of risk appetite and market positioning than of immediate liquidity feeds.
In simpler terms, M2 is a long-term environment and a macro environment, while short-term Bitcoin dynamics indicate divergence rather than liquidity transmission.
The volatility of ETF flows determines Bitcoin’s short-term price action
According to CoinGlass factsBy mid-2025, spot flows turned definitively positive, and recurring green peaks above $300 million aligned with the Bitcoin price trend towards the $120,000 – $130,000 zone.
As inflows increase, the trend goes up and volatility decreases. However, the momentum disappeared at the end of 2025.
Source: CoinGlass
The red bars strengthened, some daily outflows exceeded 800 million, and one was almost 1.2 billion, while Bitcoin fell drastically below $100,000.
Flows remained volatile until January 2026. The net monthly movement was almost $1.2 billion, but there were red days.
All this together, market sentiment remains volatile. Bitcoin benefits from structural liquidity tailwinds across cycles, but short-term price action is primarily responsive to shifts in risk appetite and institutional positioning.
Final thoughts
- Global liquidity and steady Chinese M2 growth provide a sustainable tailwind for Bitcoin over the long term, even as capital initially flows into traditional hedges.
- Short-term price action for Bitcoin has been decoupled from direct liquidity flows since mid-2025, with the risk appetite, positioning and volatility of ETF flows dominating market behavior.