Heading into 2026, liquidity signals are starting to turn bullish.
Following three consecutive rate cuts in the second half of the year, which marked the start of the easing cycle, the broader liquidity environment continues to improve, providing a supportive tailwind for risk assets.
From a macro perspective: when global liquidity statistics As the global M2 trend begins to trend higher, risk assets often follow suit as investors move further up the risk curve. Remarkably, a similar pattern now seems to be emerging.
Source: Alpharactal
According to data from Alphactral, global M2 supply has reached new record highs and is now approaching $130 trillion.
At the same time, this expansion has been uneven across regions, with China becoming the main driver.
Data showed China accounts for about 37% of the total, while M2 is $47.7 trillion. However, several other economies are experiencing a contraction in the M2, including Japan, India, Argentina, Israel and South Korea.
This scheme is offset by $40 billion from the US government Treasury plan doesn’t seem like a one-off.
Instead, major economies appear to be competing in liquidity provision, setting the stage for risky assets heading into 2026.
Liquidity is increasing, but risky investments remain cautious
Across the world, liquidity expansion appears to be happening in sync.
In the US, the $40 billion Treasury plan aims to inject money into the banking system through the issuance of government bonds. This move in turn ensures that financing conditions remain flexible, indirectly giving risky assets a tailwind.
Combined with global M2 hitting the ATH and the Fed’s easing through rate cuts and government bond measures, the macro structure clearly favors risky assets. That said, how much upside potential we see will depend on investor interest.
Source: TradingView (TOTAL)
In particular the macro tailwind have not yet supported gains in this area.
Despite three rate cuts, the TOTAL crypto market cap is down 21% this quarter, ending 2025 on a bearish note. As a result, risk assets remain well below the peaks seen at the end of the third quarter, making investors cautious heading into 2026.
Against this background, the impact of liquidity growth on risky assets is not easy to predict. That said, with the global money supply rising, this could pave the way for a recovery, making it an important metric to watch in the coming months.
Final thoughts
- Global M2 reaches a record, led by China, while major economies ease financing conditions through interest rate cuts and fiscal measures.
- Despite the easing, the cryptocurrency is down 21% in the fourth quarter of 2025, keeping investors cautious, but liquidity trends could set the stage for a recovery in 2026.