Bitcoin’s Role as a Global Liquidity Barometer

Executive Summary

Bitcoin moves in the direction of global liquidity 83% of the time over any 12-month period, surpassing other major asset classes, making it a strong indicator of liquidity conditions. Despite some short-term deviations due to unique events or internal market shifts, Bitcoin's correlation with global liquidity remains significant, particularly during valuation extremes. By combining global liquidity metrics with Bitcoin's on-chain data, investors can better understand Bitcoin's market cycles and identify moments when its price may diverge from liquidity trends.