More Money, Lower Prices: The Liquidity–Bitcoin Disconnect Explained

Bitcoin is experiencing a pullback, trading around $104,376, even as global liquidity reaches pandemic-era highs, highlighted by the US Federal Reserve injecting $125 billion and China's M2 money supply hitting $47.1 trillion. Analysts explain this disconnect by noting that not all liquidity is equal; the Fed's recent injections are targeted repo operations meant to stabilize short-term funding markets, not to stimulate broad risk assets like Bitcoin. Furthermore, much of China's massive liquidity remains trapped domestically. Currently, speculative capital is favoring sectors like AI, compute, and software stocks over crypto. Analysts suggest Bitcoin's next major upward move may only occur when quantitative tightening (QT) ends in December 2025, leading to sustained reinvestment flows that could finally drive risk appetite back toward digital assets.

(Source：BeInCrypto)