Global Liquidity Surge May Support Crypto Rebound Heading Into 2026

Crypto

Global Liquidity Surge May Support Crypto Rebound Heading Into 2026

Global liquidity trends are turning bullish as we head into 2026, with Global M2 supply reaching record highs near $130 trillion, driven largely by China. This expansion supports risk assets like cryptocurrencies, though the crypto market cap has declined 21% in Q4 2025 amid cautious investor sentiment.

• Global M2 at all-time high: Approaching $130 trillion, with China contributing 37% or $47.7 trillion.
• Uneven regional growth: Contractions in economies like Japan, India, and South Korea contrast with expansions elsewhere.
• Crypto market caution: Despite liquidity boosts, total crypto market cap down 21% in Q4 2025, below Q3 peaks.

What are the global liquidity trends heading into 2026？

Global liquidity trends are increasingly bullish heading into 2026, marked by rising Global M2 supply and coordinated easing measures across major economies. Following three consecutive rate cuts in late 2025, liquidity conditions continue to improve, providing a tailwind for risk assets including cryptocurrencies. This environment encourages investors to shift toward higher-risk investments as funding becomes more accessible.

Source: Alphractal

How is Chinas M2 growth influencing global liquidity trends？

Chinas M2 growth is a dominant force in global liquidity trends, contributing about 37% to the total Global M2, which now stands at $47.7 trillion. This surge reflects aggressive monetary policies aimed at stimulating economic activity, contrasting with contractions in regions like Japan and India. Experts from financial institutions note that such imbalances can lead to volatile capital flows, potentially amplifying risks for international markets. For instance, Alphractal analysis highlights how this dynamic encourages cross-border investments, benefiting risk assets amid broader easing. Short-term fluctuations may occur, but the overall trend supports sustained liquidity expansion through 2026.

Across the globe, liquidity easing seems to be moving in sync.

In the U.S., the $40 billion Treasury plan is designed to inject cash into the banking system by issuing government debt. In turn, this move helps keep funding conditions smooth, indirectly providing a tailwind for risk assets.

Combined with Global M2 hitting ATH and the Fed easing through rate cuts and Treasury measures, the macro setup is clearly favoring risk assets. That said, how much upside we see will depend on investor appetite.

Source: TradingView (TOTAL)

Notably, the macro tailwinds havent yet supported gains in this space.

Despite three rate cuts, the TOTAL crypto market cap is down 21% for the quarter, ending 2025 on a bearish note. As a result, risk assets remain well below late-Q3 peaks, keeping investors cautious heading into 2026.

Against this backdrop, the impact of liquidity growth on risk assets isnt easy to predict. That said, with global money supply rising, it could set the stage for a rebound, making it a key metric to watch in the months ahead.