Cycle scientist Lars von Tienen says global liquidity, a key driver of asset prices, is losing momentum. He tracks liquidity in the US, China and Europe, and data shows it is still increasing, but at a slower pace. This change means that the easy money that has supported the market since 2023 is starting to fade.
He explained that global liquidity is currently primarily driving debt refinancing rather than risky assets. The Federal Reserve’s tightening policy will make it difficult for liquidity to grow at the same rate in late 2025 and into 2026.
Bitcoin growth cycle has reached its peak
In an interview with Paul Baron, von Schinen describes Bitcoin as a reflection of global liquidity. According to him, about 40% of Bitcoin’s price is due to the liquidity situation. Based on current data, he believes the upward trend that started in 2023 is reaching its peak.
That doesn’t mean Bitcoin will crash anytime soon, but the market may not see the strong price expansion it did earlier in the cycle. As liquidity cools, the pace of growth for most risk assets, including cryptocurrencies, is likely to slow.
No altcoin season this time
Von Tienen said traders waiting for a new altcoin season are likely to be disappointed. He says there will not be a large-scale rotation into altcoins this cycle. Rather than flowing into smaller coins, new liquidity is flowing into real-world markets and industries.
Usually, altcoins rise after Bitcoin peaks, but this time the situation is different, he said. Capital is becoming more cautious, and global liquidity is not expanding fast enough to fuel a new wave of speculation.
Possibility of recession in 2026
His analysis points to a new downcycle in global liquidity starting around the second quarter of 2026 and continuing until the end of the year. At this stage, the situation may become even more challenging and both the Bitcoin and altcoin markets may weaken.
Von Tienen expects money to move into the production sector rather than the speculative sector. For crypto investors, this could mean a longer period of flat or declining prices before the next cycle begins.
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