According to BlockBeats, on August 15, Matrixport released a new research report stating that the U.S. market is entering a new round of liquidity release cycle. Structural funding support may drive Bitcoin and risk assets to continue rising, with the trend expected to last until 2026. The current funding structure, credit environment, and the early stages of previous bull markets are quite similar: ample liquidity, improved credit conditions, and a shift towards dovish policies, with multiple positive factors resonating to push asset prices up.
U.S. money market funds have rapidly expanded since the fourth quarter of 2018, growing from $3 trillion to $7.4 trillion, reaching a record high. Currently, the annualized interest income stands at $320 billion, constituting a significant influx of funds into high-yield assets. Meanwhile, corporate buybacks are also accelerating significantly. Since 2025, announced buyback amounts have reached $984 billion, with the annual total expected to exceed $1.1 trillion. Currently, volatility is low, and these funds will continue flowing into U.S. stocks, boosting valuations.
The structure of the financial system is further amplifying the effects of liquidity. Since 2008, the Federal Reserve has begun paying interest on reserves to banks, with this amount reaching $3.4 trillion and generating $176 billion in interest annually. In the current high-interest-rate environment, this mechanism has made money market funds and commercial banks the main beneficiaries. The Federal Reserve's pace of rate cuts has lagged market expectations for 32 consecutive months. To close this gap, approximately 62 basis points of cumulative rate cuts will still be needed in the coming months.
Credit issuance is warming up. Since April 2025, U.S. commercial and industrial loans have increased by a cumulative $74 billion, showing early signs of a new credit expansion cycle. Since June, credit spreads have continued to narrow, improving the financing environment, which historically has usually been positive for Bitcoin. This trend has also been initially reflected in Bitcoin's price performance. Inflation is expected to gradually decline to the Federal Reserve's target range of 2%, and volatility is converging, providing more ample policy space for a rate cut in September.
The fiscal side is also ramping up liquidity injections through bond issuance. Since the 'Great Beautiful Bill' raised the debt ceiling by $5 trillion, the Treasury has net issued $789 billion in government bonds in less than six weeks. This large-scale bond issuance coincides with Bitcoin starting a new round of upward momentum. Historically, during the fiscal expansion cycle led by Trump, Bitcoin prices often strengthened alongside government bond issuance.
