In the recently concluded second quarter, Bitcoin performed strongly, rising over 40% since April. Jamie Coutts, Chief Cryptocurrency Analyst at Real Vision, believes this surge is not coincidental but closely related to the historic expansion of global liquidity.
He stated: 'For every 1% of liquidity injected into the system, it should theoretically drive Bitcoin up by 20%. And this is just the beginning.'
The global liquidity index reached a historical high, with Bitcoin rising in resonance.
Coutts published an analysis on X (formerly Twitter) pointing out that its proprietary **Global Liquidity Index (GLI)** broke a historical high on April 10, signaling the end of a three-year consolidation period. In just nine weeks since that moment, Bitcoin's price surged in tandem, increasing by about 40%.
He emphasized: 'The weakening dollar drives the GLI to new highs, which is the direct backdrop for Bitcoin's surge. Although the GLI has only increased by 2% since then, Bitcoin has already achieved a price elasticity response of twice that, illustrating how liquidity truly drives the market.'
Coutts added that, although Bitcoin’s sensitivity to liquidity will gradually decrease over the long term, this impact is most severe in the early stages of the cycle, 'as we are witnessing now.'
What is the GLI index? How can it predict Bitcoin trends?
Coutts' Global Liquidity Index is constructed based on a series of core macro indicators:
G4 Central Bank balance sheets (Federal Reserve, European Central Bank, Bank of Japan, People's Bank of China)
M2 broad money supply
U.S. Treasury General Account (TGA)
Federal Reserve reverse repurchase agreement (RRP)
These data collectively reflect the global situation of systemic liquidity injection and withdrawal. The data shows that the current GLI is nearing $138 trillion, while Bitcoin's price is around $107,676. The two are highly correlated, almost resonating in the same direction in every liquidity cycle.
The market has not yet peaked, and the long-term bullish logic holds.
Coutts emphasizes that there are currently no signs indicating that the GLI is peaking. Operations from multiple countries and institutions support this structural growth:
The Federal Reserve continues to consume its reverse repo positions, indicating that systemic funds are being released;
The People's Bank of China is quietly expanding its balance sheet;
The European Central Bank has signaled a restart of long-term refinancing operations (LTRO).
This means that liquidity is still in an expansionary phase. Coupled with Bitcoin's high sensitivity to liquidity of '1:20', there is still considerable upward potential in the market in the medium term.
In the next three years, liquidity expansion could propel BTC to a triple-digit increase.
Looking ahead, mainstream institutions generally expect:
Global liquidity will grow by 1%-6% in the next 12 months;
Cumulative growth could reach 3%-8% by mid-2027;
If central banks successfully normalize their balance sheets, there could be an increase of 10%-15% by 2025.
According to Coutts' estimation method, even with conservative expectations, this means that Bitcoin achieving a 'triple-digit increase' before 2030 is entirely realistic.
Coutts summarizes: “The panic buying in the market will ultimately trigger a major uptrend, and we are still in the early stages of this script.”
