Liquidity surge to ignite the next crypto bull run

Rising global liquidity—driven by U.S. Treasury actions and China's policy shift—may set the stage for an explosive bull market in crypto.

Global liquidity is quietly climbing again, and that could change everything for crypto markets. According to experts Michael Howell and Raoul Pal, this shift could trigger the next major bull run in digital assets like Bitcoin and Ethereum.

Michael Howell, a global liquidity analyst, sees signs of a structural liquidity wave forming. This trend is fueled by the U.S. Treasury’s drawdown of its cash reserves and China’s aggressive monetary easing, which includes yuan devaluation—especially against gold. Howell argues this isn’t just a temporary boost but a long-term shift supported by growing fiscal pressures and rising debt levels.

Raoul Pal agrees, but zooms in on crypto. He believes crypto assets are highly sensitive to liquidity changes, acting as "high beta" investments that react strongly to money flowing into global markets. Pal predicts we are entering the so-called “banana zone,” a period of exponential crypto gains sparked by liquidity, shifting narratives, and returning retail investors. His models suggest crypto market cap could more than triple by 2026, potentially surpassing $10 trillion.

Still, both experts warn that this bull case depends on liquidity continuing to grow. If inflation returns or the U.S. Federal Reserve tightens monetary policy too quickly, it could stall the momentum. Volatility is also expected to remain high.

For now, the signs are aligning. Liquidity is rising, and crypto may once again become the top-performing asset class riding that wave.