More than 90% of the world’s central banks have cut or kept interest rates unchanged for 12 consecutive months, a pattern rarely seen in the past 35 years. This easing cycle resulted in 316 rate cuts over two years, more than the 313 cuts during the 2008-2010 financial crisis.
Despite this global liquidity expansion, Bitcoin has been decoupled from money supply growth since mid-2025. This trend raises the question of when major cryptocurrencies will respond to capital inflows.
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Unprecedented monetary easing since the pandemic
Based on data from the Kobesi Letter, global monetary policy has entered its most aggressive easing phase since the coronavirus pandemic. Fewer than 10% of central banks have raised interest rates, and most have lowered or maintained their policies. This trend has continued for a year, marking a rare global currency reversal.
The extent of this easing is clear from the cumulative interest rate cuts. From 2023 to early 2025, central banks in both developed and emerging economies cut interest rates 316 times, more than the 313 cuts between 2008 and 2010, when the global financial system was under severe pressure.
Historically, significant increases in asset prices, particularly risky assets such as stocks and cryptocurrencies, have been preceded by coordinated monetary easing. However, Bitcoin’s response to this liquidity wave has been much more muted compared to previous cycles. In previous research A correlation of 0.94 was found between BitcoinThe relationship between the price of and the global M2 money supply (from May 2013 to July 2024) currently appears to have weakened temporarily.
This decoupling raises questions about timing and market drivers. Analysts have observed that Bitcoin often lags global liquidity increases by 60 to 70 days. If this historical pattern continues, the ongoing financial expansion could delay Bitcoin’s rise until late 2025 or 2026.
2026 Financial Shock Scenario
Market participants have outlined a scenario that could play out through 2028, with 2026 as the turning point. This matches the historical cycle described by the Benner Cycle, a 19th century market timing model that has surprisingly predicted many financial turning points.
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According to market analyst NoLimitGains, several global stress points are converging towards 2026. Its flaws include U.S. Treasury funding problems, Japan’s yen carry trade risk, and China’s large credit leverage. Disruptions along any of these lines can cause a global shock, but problems at the same time can trigger a system-wide crisis.
The first stage is defined by a Treasury funding shock, presumably caused by weaker Treasury auctions. The United States faces record debt issuance in 2026 due to widening budget deficits and declining external demand. The slump in auctions and the decline in indirect bidding reflects the UK’s 2022 gold and silver crisis. A sharp rise in the dollar value, loss of liquidity, Japanese intervention, depreciation of the renminbi, widening of credit spreads, sale of risky assets, etc.
Then, in Phase 2, central banks act through liquidity injections, swap lines, and Treasury buybacks. This government response will inject capital and set the stage for the wave of inflation that many analysts expect from 2026 to 2028. At this stage, real yields could collapse, gold and silver could soar, Bitcoin could recover, and commodities could rise as the dollar peaks.
The MOVE index, which tracks bond market volatility, is already rising. When MOVE, USD/JPY, Chinese Yuan, and the 10-year US Treasury yield move in the same direction, analysts view it as a warning sign that a significant event could be coming in the next 1-3 months.
Bitcoin’s lag presents potential opportunity
Bitcoin’s recent performance highlights its unusual decoupling from the global liquidity expansion in mid-2025. Despite central banks increasing money supply, cryptocurrencies have remained flat, disappointing those who expected them to rise soon.
The optimistic view is that while Bitcoin remains undervalued relative to global liquidity, this lag presents a buying opportunity. Historically, Bitcoin has often rebounded 60-70 days after a large increase in global M2 supply.
Some analysts believe participants are waiting for further clarity on inflation and central bank policy. Some cited unresolved issues that could be holding back price increases, including regulatory developments, institutional activity and strong technical resistance.
