BTC Crash: Liquidity Up, Price Down — Why?

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Most analysts are blaming a lack of liquidity for Bitcoin’s dire performance, but there is more to it than just that. 

Bitcoin’s 50% decline from all-time highs in just four months comes at a time when global liquidity has increased, which counters the common premise that the price follows liquidity.

“The divergence is striking, and it demands explanation,” said Chris Tipper, chief economist and strategist at the Ainslie Group. Global liquidity has climbed around $5 trillion since Bitcoin’s peak in October and is now almost $190 trillion, according to Ainslie Wealth.

However, this is being driven by the People’s Bank of China, which added $1 trillion in 2025 and likely another trillion this year, said Tipper.

Chinese Favor Gold Over Bitcoin
Chinese liquidity doesn’t flow into Bitcoin (which is banned), it flows into gold reserves, domestic infrastructure, and the real economy, he added.


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