Bitcoin's remarkable surge in the second quarter is being closely linked to an unprecedented increase in global liquidity, as noted by Jamie Coutts, Chief Crypto Analyst at Real Vision. He asserts that every percentage point of liquidity infused into the financial system could lead to a potential 20% rise in Bitcoin's value.
In a recent post on X, Coutts highlighted that his Global Liquidity Index (GLI) reached a new all-time high on April 10, following three years of stagnation. Since that date, Bitcoin has experienced a striking 40% increase. "Bitcoin's 40% rally since April 10 coincides with the GLI breaking out to record highs amid a declining US dollar. The GLI has since risen by 2%, reinforcing the correlation between liquidity and Bitcoin's performance," he explained.
Coutts further emphasized that while Bitcoin's reaction to changes in the GLI may diminish over time, each additional 1% of liquidity should result in a price movement exceeding 20% for Bitcoin. He also warned of the potential for a "panic buying" episode that could significantly impact prices in the future, stating, "It will be the best of times, it will be the worst of times."
The accompanying chart illustrates the relationship between the GLI and Bitcoin prices from 2018 through June 2025, showing the GLI approaching approximately $138 trillion while Bitcoin is trading near $108,000. This highlights a strong correlation between the two metrics across different liquidity cycles.
Coutts constructs the GLI by analyzing central bank balance sheets, broad money aggregates like M2, and key liquidity accounts from the US Treasury and the Federal Reserve's reverse-repo facility. Since the April breakout, the GLI has increased by only about two percentage points, yet Bitcoin's market capitalization has surged beyond what his model would imply, which he attributes to typical early-cycle price responses in liquidity regimes.
Looking ahead, Coutts sees little sign of the GLI's growth slowing down. With the Federal Reserve continuing to reduce its reverse-repo facility, the People's Bank of China expanding its balance sheet, and the European Central Bank hinting at renewed long-term refinancing operations, the overall economic environment remains bullish.
According to mainstream liquidity research, modest but stable growth is anticipated, with expectations of a 1-6% increase in global liquidity over the next year and cumulative growth of 3-8% by mid-2027. Projections suggest a 10-15% rise by the end of the decade as governments manage record debt levels and central banks adjust their policies. If Coutts' projections prove accurate, even the lower end of these estimates could allow for substantial gains in Bitcoin, potentially reaching triple-digit percentage increases before 2030.
As of the latest update, Bitcoin is trading at $107,676.
