Liquidity and Bitcoin
Three measures of liquidity next to Bitcoin's price: what they contain, what they miss and how they change.
Data as of 21 Oct 2026
Fed net liquidity is $5.80T, -2.0% over 3 months and +0.3% over 12 months. The liquidity impulse (the percentile of annual growth in the history so far) is 51 out of 100: 0 means the strongest tightening, 100 the strongest easing.
Liquidity is only one of the factors behind Bitcoin's price. The lead and the correlation for each measure below are measurements from the past.
Fed net liquidity
Fed balance sheet − Treasury account − reverse repo
What is in it: How many dollars are really in the financial system. The Fed can keep its balance sheet unchanged, but when the Treasury fills its account at the Fed (TGA) or banks park money in reverse repo, money disappears from the market. It updates weekly and moves the fastest of the three measures.
What it misses: It only sees America. Easing in China or Japan is not in it.
US M2 money supply
cash, deposits and money market funds
What is in it: The classic broad money supply, meaning money in the hands of people and firms. It reacts more slowly than the Fed's balance sheet, but it measures money, not bank reserves.
What it misses: It moves with a lag after a central bank action and does not capture liquidity through the shadow banking system.
G3 central bank balance sheets
Fed + ECB + Bank of Japan in dollars
What is in it: The sum of the balance sheets of the three largest central banks converted into dollars at the current exchange rate. The closest thing to what is called global liquidity. The exchange rate is part of the story: a weak dollar raises the dollar value of foreign balance sheets.
What it misses: China is missing. There is no free source with a long and fresh history of Chinese money supply, so this is honestly G3, not a global aggregate.
What G3 is made of
Dollar value of the balance sheets as of 21 Oct 2026.
Frequently asked questions
Why watch liquidity?
Liquidity is the fuel of risky assets. When money is added to the system, part of it ends up in stocks and crypto; when it drains, prices fall even without bad news. Bitcoin's cycles overlap quite a lot with liquidity cycles.
What is Fed net liquidity?
The Fed's balance sheet minus the Treasury General Account (TGA) and reverse repo operations. It is an approximate estimate of the dollars that can flow freely into markets.
What does "leads BTC by X weeks" mean?
We shift the year-on-year liquidity change curve forward by 0 to 26 weeks and look for the shift at which it matches the year-on-year change of Bitcoin's price most closely. It is a measurement from history since 2013, not a forecast. Correlation is not causation.
Why is China not here?
There is no free source with a long, fresh and consistent history of Chinese money supply or the PBoC balance sheet. We preferred to label the aggregate G3 rather than distort it.
Sources: FRED (WALCL, WTREGEN, RRPONTSYD, M2SL, ECBASSETSW, JPNASSETS, exchange rates), CoinMetrics (BTC price). The lead and the correlation are our own calculations from history since 2013. For information only, not investment advice.