Global liquidity specialist Michael Howell delivered a stark message for risk assets during a recent appearance on the Bankless podcast: the post-2008 “everything bubble” is coming to an end, and cryptocurrencies are joining the cycle late rather than at its beginning.

Liquidity Defined Differently

Howell defines liquidity not as traditional measures like M2, but as the flow of money through global financial markets. This includes repo markets, shadow banking, and other non-bank channels—essentially capturing where conventional liquidity definitions stop. According to Howell’s Global Liquidity Index, weekly global liquidity has doubled over the past 15 years, rising from under $100 trillion in 2010 to just below $200 trillion today.

However, Howell emphasizes that momentum, not level, drives market risk. He tracks a 65-month global liquidity cycle, reflecting a rhythm of debt refinancing rather than new capital raising. Today, 70–80% of transactions are debt rollovers, meaning the system relies heavily on existing debt to fund liquidity.

“Ironically, it’s old debt that finances new liquidity,” Howell said.

Debt-to-Liquidity Ratio Signals Tension

Howell monitors the debt-to-liquidity ratio in advanced economies—total public and private debt relative to refinancing liquidity. Historically, the ratio averages around 2x, with deviations signaling market stress:

• Below average: liquidity is abundant, fueling asset bubbles.
• Above average: refinancing tensions rise, increasing the risk of financial crises.

Currently, Howell believes the global economy is transitioning out of the “everything bubble”, a period of excess liquidity fueled by repeated QE and emergency support. The COVID-19 era intensified this, as borrowers refinanced debt at near-zero rates, creating a visible debt maturity wall now coming due in a tighter funding environment.

Warning Signs in US Markets

Howell highlights stress in repo markets, with SOFR frequently trading above its normal range despite being collateralized.

“We’ve started to see these repo spreads blow out… it’s the frequency, not just the size, that matters. If trades fail and leveraged positions unwind, it could turn quite ugly.”

He categorizes global liquidity into four regimes—rebound, calm, speculation, and turbulence—and places the US in “speculation”, while Europe and parts of Asia are in late calm. Historically, early and mid-upswings favor equities and credit, peaks favor commodities and real assets, and downswings favor cash and long-duration government bonds.

Implications for Crypto

Howell’s analysis implies that cryptocurrencies are late to this cycle, entering markets as liquidity peaks and traditional risk assets face pressure. Investors should remain cautious, as ongoing refinancing tensions and liquidity contraction may weigh on high-risk and speculative assets.