China’s $24.9T Liquidity: Is Bitcoin About to Go on a Wild Ride? 🚀

Key Takeaways

How might China’s burgeoning M2 money supply influence the fortunes of Bitcoin?

It is quite an interesting fact, dear reader, that there exists a notable historical correlation between China’s liquidity, akin to a charming dance partner, and the bullish price surges of the much-discussed Bitcoin, thereby potentially elevating global demand for the intriguing cryptocurrency. ⚖️

What might be Bitcoin’s short-term aspirations, according to the current market gossip?

The whispers from the market forecasts suggest an ambitious short-term target of $117,000, spurred on by liquidation clusters that seem to congregate as if there were a ball to attend.

Bitcoin [BTC] may be on the cusp of a delightful influx of liquidity following a rather distressing episode of market turbulence-akin to a public scene at a ball that caused quite the scandal. All attention is now fastened upon our Chinese investors, as the global liquidity trends could, perchance, tilt in favor of this intriguing digital asset, thereby helping it to once again bask in the warm glow of bullish momentum.

Is Chinese liquidity poised to come to Bitcoin’s aid?

A recent communication from the reputable Alphractal has revealed a startling surge in the M2 money supply of China, which at current measure, has reached a staggering $24.9 trillion, surpassing that of our good friends across the Atlantic. Now, one must consider: what is M2, you ask? It is the measure of all money swirling about in an economy-a rather vital indicator of economic vitality.

Historically, we have borne witness to a robust connection between the ascension of China’s M2 and the esteemed performance of Bitcoin in the market. An increase in such liquidity often leads to an equal rise in the price of the ever-enigmatic Bitcoin. 💸

This fascinating phenomenon occurs because the excess liquidity, much like well-buttered bread, tends to flow into other asset classes, with Bitcoin being one of the principal beneficiaries under historical conditions, one might say.
The esteemed analyst, João Wedson, supports this optimistic outlook and observes that a multitude of Chinese miners and Old Guard ‘whales’ remain active in this shimmering market. He has famously declared,

“As long as China’s M2 keeps increasing, global liquidity will likely continue to favor Bitcoin.”

A counterpoint to consider

However, not all are in agreement, as Ray Youssef, the CEO of NoOnes, offers a rather contrary perspective regarding the liquidity and its effect on BTC. In a rather instructive epistle, he opines,

“Most of the new liquidity is likely to be absorbed domestically within the nation’s economic system. China’s M2 expansion reveals what’s really happening under the hood of the global economy.”

It is his belief that the increase in China’s liquidity aims primarily to stabilize its own internal economy and is less about stimulating investments in assets foreign to its borders, like our dear Bitcoin.

Data from the ever-astute Sosovalue echoes this viewpoint, revealing that the demand for Bitcoin in China has, rather disappointingly, been found to be rather low. The Bitcoin exchange-traded funds based in Hong Kong find themselves rather underwhelming, with an entire valuation of only $461 million, stark in its contrast to the impressive $61.91 billion accounted for by the United States’ Bitcoin ETFs.

Indeed, the holdings of Bitcoin by the U.S. government alone are valued at an impressive $34 billion, despite the improving lowly status of America’s money supply compared to China’s extravagant figure.

Yet, Mr. Youssef graciously concedes Bitcoin’s connection to global liquidity, stating,

“Monetary easing cycles, wherever they occur, reinforce the long-term case for non-sovereign assets. Bitcoin continues to evolve as a central part of that conversation.”

The Bitcoin cycle and its fleeting targets

The potential for a proverbial rally now hinges, dear reader, upon whether Bitcoin chooses to adhere to its fractal cycle-a rather enchanting four-year pattern that has historically demonstrated an impeccable reflection of this asset’s movements.

If Bitcoin decides to embrace this illustrious pattern, it may indeed defy the expectations tied to the whims of Chinese liquidity and soar to new heights. Conversely, should it falter and break this pattern, one might wonder if new heights exceeding the current valuation of $108,000 could emerge. How intriguingly scandalous! 🤔

Short-term anticipations still point cheerily toward a $117,000 target, as suggested by the curious liquidation heatmap, which reveals a congregation of short-seller positions around that rather delightful price point.

2025-10-17 16:48