Despite unprecedented monetary easing worldwide, Bitcoin has yet to respond in line with historical trends, leaving investors and analysts questioning the timing of the next major rally.
Historic Global Monetary Easing
Over the past 12 months, more than 90% of the world’s central banks have either cut rates or held them steady—a pattern rarely observed in the last 35 years. From 2023 through early 2025, 316 rate cuts were implemented globally, surpassing even the 313 cuts seen during the 2008–2010 financial crisis.
Coordinated easing has historically fueled asset price growth, especially in risk assets such as stocks and cryptocurrencies. However, Bitcoin’s response has been muted, indicating a temporary decoupling from global liquidity flows.
Decoupling From Money Supply
Historically, Bitcoin has shown a strong correlation (0.94) with the global M2 money supply. Yet since mid-2025, this connection appears weakened. Analysts note that Bitcoin often lags liquidity injections by 60–70 days, suggesting that the cryptocurrency may not react immediately to the recent wave of monetary expansion.
This lag has prompted speculation that the next significant Bitcoin rally could materialize in late 2025 or 2026.
2026 Financial Shock Scenario
Market watchers highlight 2026 as a potential turning point, citing the Benner Cycle, a long-standing market timing model that has historically forecasted financial pivots. Analysts point to several converging stress points:
- US Treasury funding pressures with record debt issuance
- Japan’s yen carry-trade vulnerabilities
- China’s high credit leverage
A potential sequence could unfold as follows:
- Phase One: Treasury funding shocks trigger dollar surges, liquidity withdrawal, widening credit spreads, and risk asset sell-offs.
- Phase Two: Central banks respond with liquidity injections, swap lines, and Treasury buybacks, setting the stage for inflation waves, rising precious metals, and a potential Bitcoin recovery.
Early warning indicators, such as the MOVE Index, USD/JPY movements, and Chinese yuan fluctuations, suggest that market shocks could arrive within one to three months.
Bitcoin’s Lag as an Opportunity
Bitcoin’s unusual sideways trading despite massive liquidity could provide a strategic buying window. Historically, BTC rallies have followed 60–70 days after major increases in global M2 supply, offering a potential advantage to early entrants.
Factors currently restraining Bitcoin include:
- Regulatory uncertainty
- Institutional participation
- Strong technical resistance
- Market participants awaiting clarity on inflation and central bank actions
Conclusion
While Bitcoin has decoupled from the recent liquidity surge, historical patterns and macroeconomic conditions suggest that the cryptocurrency could experience a delayed but significant rally in late 2025 or 2026. Investors monitoring liquidity indicators, bond market volatility, and cross-border capital flows may find opportunities in this unusual lag phase.