Just crossed with this bullish Leon Tweet talking about Global liquidity and worth knowing about it.
As you know, the crypto and stock markets have been conditioned by the state of the world and acted accordingly to it. Higher rates, shrinking balance sheets and constant recession talk have been the mental model. However, under the surface, the global liquidity picture is slowly changing and it is doing it in a way that historically has not been hostile to risk assets at all.
The pace of monetary contraction is facing, broad money measures are stabilizing and turning higher and the largest central banks appear to be moving out of the balance sheet instead of going deeper into one. This kind of environment does not scream panic or crisis, it usually marks the early stages of a new expansionary phase.
Like the tweet itself states:
- Global money supply growth is no longer rolling over and is beginning to reaccelerate on a year over year basis.
- Financial conditions across major economies are easing and even if the rhetoric has not caught up yet.
- The drag from G-3 central bank balance sheets is diminishing with a flip back to growth increasingly likely.
- Past cycles show that this transition phase tends to support equities before it becomes obvious in economic data.
- Liquidity typically leads price, not the other way around.
If this trend continues, the argument for a constructive 2026 in equities becomes pretty solid and historically when liquidity improves, crypto does not just participate, it overreacts. Right now there is no clear liquidity signals pushing against a bullish medium term outlook.
Fortune favors the patient.
Will 2026 be a good year?
Source:
Global Liquidity Is Turning – Is 2026 the Breakout Year?
byu/kirtash93 inethtrader
Posted by kirtash93
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a debt crisis might be coming sooner than we think