According to data from Bitcoin Magazine ProThe global money supply, also known as global liquidity, has reached an all-time high of $95 trillion. Bitcoin investors and analysts are keeping a close eye on this key indicator, as higher liquidity has historically preceded major bull runs.
Global liquidity is the total amount of money circulating in the global financial system. It includes the M2 money supply of major economies such as the US, China, EU, Japan, etc. M2 includes cash, bank deposits, money market funds, and other near-money assets.
This figure has recently Reach $95 trillionis approaching the $100 trillion milestone. The previous all-time high was also around $95 trillion, when Bitcoin reached a new ATH of $73,000 in March of this year and $90 trillion when Bitcoin peaked at $69,000 in November 2021.
Higher global liquidity encourages spending on riskier assets like Bitcoin. Historical data shows a strong correlation between liquidity expansion and Bitcoin bull markets. This is because increased money creation typically leads to lower interest rates and quantitative easing by central banks. This dynamic has played out repeatedly throughout Bitcoin’s history.
Some investors see Bitcoin as an alternative to the central bank system because it has a fixed supply schedule. Bitcoin could be poised for another price increase if the current upward liquidity trend continues.
Bitcoin has already recovered to around $64,500 after briefly dipping below $60,000 last month. With global liquidity reaching new heights, Bitcoin looks poised to continue its bull run.