Will cryptocurrencies in 2026 leverage the global liquidity rebound? $130 trillion M2 hits a record high

A recent phenomenon that cannot be ignored is quietly fermenting in the global capital markets—the global M2 supply has risen to a historic peak of $130 trillion. The investment opportunities behind this number are becoming the market’s focus, especially with expectations of crypto market surges.

Liquidity Flood Era: China Contributes $47.7 Trillion

The core driver of this round of global monetary easing comes from China. According to the latest data, China’s M2 has reached $47.7 trillion, accounting for about 37% of the global total. What does this mean? Simply put, more than one-third of the new liquidity globally comes from the Chinese market.

Meanwhile, the U.S. Treasury’s $40 billion stimulus plan is also ramping up, while countries like Japan and India are showing signs of M2 contraction. This uneven expansion pattern instead reinforces a signal—major economies are competing to release liquidity.

Why Has Abundant Liquidity Not Boosted Crypto Assets?

There is an interesting contradiction here: despite global liquidity reaching record highs, the total market cap of cryptocurrencies declined by 21% in the fourth quarter.

Several reasons are worth pondering:

• Investors remain cautious, with regulatory uncertainties reducing the appeal of risk assets
• The market is still digesting the aftereffects of Q3’s highs, with cash-out pressures persisting
• Although the easing policy signals are clear, market doubts about their sustainability remain

In short, liquidity dividends have not yet fully transmitted to risk assets.

Where Do Expectations for a 2026 Rebound Come From?

Looking ahead to next year, several factors jointly create a foundation for crypto market surges:

First, the Federal Reserve has completed three consecutive rate cuts since the end of last year, marking the start of an easing cycle. Against this backdrop, financing costs decrease, and investors’ risk appetite will gradually recover.

Second, although global M2 growth is uneven, the overall trend has been established. Especially with China’s continued monetary easing, this will continue to support the global liquidity environment.

Historical experience tells us that when global liquidity indicators start to rise, risk assets tend to rebound accordingly. This time, it seems to be replaying a similar script.

Data Perspective on the Imagination Space for 2026

From a technical standpoint, if global M2 continues to expand, the cryptocurrency market could face a 20%-30% rebound space. But all of this depends on—a shift in investor sentiment and continuous liquidity injection.

The current valuation of the crypto market has already retraced from Q3 highs, which in some ways has accumulated energy for a new upward movement. The key question is not “Will it rise?” but “When will it rise?” and “How much will it rise?”

Cautions to Consider

Although global liquidity is abundant, its distribution is highly uneven. The contraction of M2 in Japan and India indicates that not all economies are releasing liquidity synchronously. This could lead to capital flow instability, affecting the performance of risk assets.

Additionally, changes in regulatory policies, geopolitical risks, and other black swan factors still exist. Having liquidity alone is not enough; shifts in market sentiment are equally critical.

Key Indicators to Watch

To judge whether crypto market surges are truly coming, focus on:

• Global M2 growth rate: signals of sustained expansion
• Correlation with risk assets: whether risk assets begin to decouple in a high-liquidity environment
• Investor sentiment indicators: whether market expectations of easing policies have changed
• China policy trends: as a major contributor to global M2, its monetary policy direction is crucial

Overall, global liquidity has become a given, and the macro foundation for a 2026 crypto rebound is in place. But don’t be fooled by the numbers—liquidity is a necessary condition, not a sufficient one. The restoration of investor sentiment, risk appetite, and continued policy support are all indispensable.

The current question is not “Should I get in?” but “How to wait for the best entry point?”