The founder of the analytics platform Alphractal, João Wedson, drew attention to the rapid growth of liquidity in China. According to his data, the M2 money supply in dollar terms reached $52.2 trillion — 2.3 times more than the US figure.

At the same time, Wedson noted that such growth does not mean an increased appetite for risk. Part of the money settles in deposits, banks and debt refinancing rather than turning into consumption, inflation or a powerful asset rally.

Want more exclusive news and analytics? Subscribe to our Telegram channel, discuss the news and share your opinions on the latest market events in the chat!

The growth of liquidity in China

In support, Wedson presented several charts at once. Among them — the dynamics of China’s M2 in dollars, its comparison with Bitcoin (BTC), as well as a comparison of the annual change in the money supply with the price of the first cryptocurrency.

The analyst also compared the money supply with key Chinese indices — Hang Seng, Shanghai Composite and Shenzhen Component. By his observations, the main flow of liquidity is not yet reaching the markets and real demand, remaining inside the financial system.

Bitcoin loses its link to stocks

In another post, Wedson pointed to the breakdown of the correlation between Bitcoin and the exchange-traded fund iShares Expanded Tech-Software ETF. This link remained strong right up until 2025, but is now weakening.

In essence, the analyst notes, no sector of the traditional market any longer has a strong correlation with the cryptocurrency BTC. In other words, the digital coin moves in one direction, while stocks move in another.

These two observations may be connected. If China’s liquidity does indeed remain locked inside the banking system and does not reach the markets, then its growth is not yet translating into demand for either stocks or Bitcoin. This is consistent with the fact that Bitcoin has decoupled from the dynamics of the tech sector and is increasingly reacting to global liquidity flows rather than to the behavior of stock indices.

Source: BeInCrypto