Global Liquidity
Central-bank liquidity — Fed net liquidity, money supply and balance sheets — the master tide beneath risk assets.
Liquidity regime
Max headwind
Liquidity is contracting -5.3% YoY and the impulse is still worsening — the toughest configuration for risk assets, particularly the liquidity-sensitive ones (crypto, unprofitable growth).
G3 central banks
$17.65T
US net liquidity
$5.83T
US M2
$23.29T
Stablecoins
$305.4B
The liquidity cycle · YoY rate of change
■ G3■ US net liq■ US M2■ Stablecoins (right)
This is the FLOW — how fast each liquidity pool is growing or shrinking versus a year ago. Stablecoins run far hotter than the fiat legs, so they get the right-hand scale — read each group against its own axis. Assets respond to turns in these lines, not to the levels above: a line hooking upward from below zero has historically been the earliest “tide is turning” signal, arriving before the level itself recovers. Crossings of the zero line mark expansion ↔ contraction regime changes per leg.
G3 liquidity (led 12w forward) vs Bitcoin
Best-fit lead measured live from 13-week changes: 12 weeks (~84 days), correlation r = 0.26. Both lines are 13-week changes — the exact series r is measured on, so co-movement here IS the correlation.
Blue = Bitcoin 13-week % change (left). Gold = G3 liquidity 13-week % change, shifted forward by its measured best-fit lead (right). When these wiggle together, the liquidity signal is live; when they decouple, the narrative is running on something else.
Lead/lag matrix · best-fit lead (weeks) and correlation
13-week changes, 0–18 week lead scan
| Asset | G3 central banks | US net liquidity | US M2 | Stablecoins |
|---|---|---|---|---|
| Bitcoin | 12w · r=0.26 | 8w · r=0.31 | 0w · r=-0.19 | 13w · r=-0.34 |
| S&P 500 | 12w · r=0.44 | 13w · r=0.33 | 16w · r=-0.16 | 15w · r=-0.26 |
| NASDAQ 100 | 12w · r=0.43 | 10w · r=0.36 | 16w · r=-0.23 | 13w · r=-0.4 |
| Gold | 0w · r=0.4 | 14w · r=-0.34 | 18w · r=0.24 | 18w · r=0.56 |
Each cell answers: “when this liquidity measure moves, how many weeks later does the asset respond, and how tightly?” Green = strong positive coupling (r ≥ 0.5). A lead of 0w means coincident. These are measured relationships over the trailing ~2 years — they drift, which is exactly why this recomputes hourly instead of quoting folklore.
The 60-second version
Liquidity is the tide beneath every asset: the amount of money the system has available to chase things. When it expands, risk assets float higher almost regardless of valuation; when it drains, the same assets sink on the same fundamentals. The catch — and the whole reason this tool exists — is that assets respond with a lag. The popular claim is “Bitcoin follows global liquidity by ~10 weeks”. Instead of repeating that folklore, this page measures the lead live: it scans 0–18 week offsets for every asset against every liquidity source and shows you the current best-fit lead and how tight the relationship actually is right now.
The four liquidity legs
- G3 central banks (the core) — Fed + ECB + Bank of Japan balance sheets, converted to dollars weekly at live FX. Balance-sheet money is the causal engine of global liquidity — this is the line the famous overlay charts are really tracking.
- US net liquidity — Fed balance sheet minus the reverse-repo facility minus the Treasury General Account — the dollars actually reaching markets after the two big sinks take their share. The formula that mapped tick-for-tick onto the S&P through 2021-23.
- US M2 — broad money held by the public, weekly. Slower-moving, but its year-on-year turn from contraction to growth has historically marked major risk-asset bottoms.
- Stablecoins (crypto-native) — total circulating USD stablecoins from DeFiLlama — the dry powder already sitting on-chain. For crypto specifically, this is the most direct liquidity measure that exists.
How to use it
- Start at the regime verdict — expanding-and-accelerating is the maximum tailwind; contracting-and-worsening the maximum headwind. The IMPULSE (13-week annualised) matters more than the level — assets respond to the change in the flow, not the stock.
- Read the money chart — the gold line is G3 liquidity shifted forward by its measured lead. Where gold goes, blue has tended to follow — so the gold line's most recent stretch is, statistically, a sketch of the asset's next weeks. Treat it as a base rate, not a prophecy.
- Check the matrix before trading the story — the lead and the correlation drift over time. If BTC's r against G3 has decayed to 0.3, the liquidity narrative is currently weak regardless of what the chart looks like. The matrix is the lie-detector for liquidity Twitter.
- Divergences are the trade — liquidity rising while an asset lags its measured response window = potential catch-up. Asset sprinting far ahead of the gold line = running on narrative, not money.
Methodology & honesty
Fed (WALCL), reverse repo (RRPONTSYD), Treasury General Account (WTREGEN), M2 (WM2NS), ECB (ECBASSETSW) and BoJ (JPNASSETS) come from FRED; euro and yen balance sheets are converted at live Yahoo FX rates onto a weekly grid; stablecoin supply comes from DeFiLlama’s public API. Best-fit leads are Pearson correlations of 13-week changes across a 0–18 week lead scan over the trailing ~2 years, recomputed hourly. One honest omission: the foreign M2 series (eurozone, Japan, UK, China) are stale or discontinued on this data feed, so no pretend “global M2” is constructed from dead data — the G3 balance-sheet composite is the fresher, more causal stand-in.
In the MTS framework
Liquidity is the widest Space lens of all — broader even than the business cycle. A structurally cheap asset (Motion) in a draining-liquidity regime deserves smaller size than the same setup with the tide coming in. Pair the regime verdict with the Credit Spreads traffic light: liquidity says how much water is in the pool, credit says whether anyone is drowning. When both turn together, believe them.