According to data from Bitcoin Magazine Pro, the global money supply, also known as global liquidity, has hit an all-time high of $95 trillion; Bitcoin investors and analysts closely watch 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 encompasses the M2 money supply of major economies like the U.S., China, EU, Japan, etc. M2 includes cash, bank deposits, money market mutual funds, and other near-money assets.
This figure recently hit $95 trillion, approaching the $100 trillion milestone. The previous all-time high was around $95 trillion, as well, when Bitcoin hit a new ATH in March this year at $73,000 and $90 trillion when Bitcoin hit its peak of $69,000 in November 2021.
Higher global liquidity encourages spending on riskier assets like Bitcoin. Past data shows a strong correlation between liquidity expansion and Bitcoin bull markets. This is because more money creation typically leads central banks to lower interest rates and implement quantitative easing. This dynamic has played out repeatedly over Bitcoin’s history.
Some investors view Bitcoin as an alternative to the central banking system because it has a fixed supply schedule. Bitcoin could be poised for another price surge if the current upward liquidity trend persists.
Bitcoin has already recovered to around $64,500 after dipping below $60,000 briefly last month. With global liquidity hitting new highs, Bitcoin appears primed to continue its bull run.