Let's talk about the current situation regarding what people care most about: "liquidity".
First, we have macro liquidity, which refers to the abundance of funds in the global financial system.
To summarize the overall conclusion, global central banks are still withdrawing funds from the market, but the strength and speed of this withdrawal have slowed down. The most tense phase may be passing, and we are currently at a turning point.
Looking at the data from the Federal Reserve:
Balance sheet reduction: As of July 2, 2025, the Federal Reserve's total balance sheet has decreased to $6.66 trillion, having reduced by about $562 billion over the past year. It is still continuously withdrawing base currency from the market, but the speed has significantly slowed.
At the same time, there are two indicators showing that a large amount of funds are not active in the economy: 1) The overnight reverse repurchase (RRP) balance is as high as $631.1 billion, which is the idle money of financial institutions held at the Federal Reserve; 2) The Treasury General Account (TGA) balance has risen to $372.2 billion, which is the liquidity temporarily 'seized' from the market by the U.S. government.
Most importantly, M2. The U.S. M2 increased to $21.94 trillion in May, growing by about 4.2% year-to-date, but this growth rate is far below the peaks of 2021-2022, indicating weak momentum for money creation, which indirectly confirms that we have never entered a true bull market.
In contrast to the macro situation, the liquidity in the crypto market is very abundant.
Stablecoins have expanded rapidly, with a total market value reaching approximately $255.6 billion. Among them, USDT dominates with a scale of $158.6 billion, accounting for 62%, while USDC ranks second with $62.2 billion (24%).
Stablecoins are the most direct base currency in the crypto market, with USDT and USDC alone adding approximately $48 billion in supply in 2025, keeping liquidity at full capacity. Additionally, Tether holds more than $120 billion in U.S. Treasury bonds, with its interest income being able to support the issuance of its stablecoins, meaning that crypto liquidity has a continuous blood supply pump.
Even excluding stablecoins, the total locked value in DeFi exceeds $11.6 billion, with lending protocols' total value locked (TVL) reaching a historic high of $5.56 billion.
Is crypto lacking liquidity? In fact, it is not lacking; most of the liquidity is earning relatively stable returns and has not directly flowed into the secondary market.
The altcoin season can still be something to look forward to.
