Real Vision analyst Jamie Coutts argues that the current bitcoin market is being driven less by the asset\u2019s four-year issuance cadence and far more by a broadening tide of global liquidity that is only now beginning to roll. In a wide-ranging interview with \u201cCrypto Kid,\u201d Coutts laid out a cycle framework anchored in policy, bank credit, and balance-sheet dynamics, while cautioning that classic momentum warnings and a cooling of corporate-treasury buying warrant respect.<\/p>\n
\u201cFrom a first-principles basis, global liquidity\u2026drives risk assets,\u201d Coutts said, adding that when he regresses bitcoin against his preferred liquidity composite\u2014built from central-bank balance sheets, global money supply, FX reserves and elements of commercial\/shadow banking\u2014\u201cyou find that there\u2019s explanatory power.\u201d The danger, he warned, is over-fitting a moving relationship. \u201cMarkets are non-stationary\u2026 The correlation itself is a moving target, so I wouldn\u2019t get too tied up in charts where you\u2019re fine-tuning the lag. That lag period will change all the time.\u201d Even so, he called the connection between liquidity and risk \u201cas good as anything I\u2019ve ever seen.\u201d<\/p>\n
The interview opened on a point of contention in recent months: short-term divergences between rising global liquidity gauges and bitcoin\u2019s price since US spot ETFs<\/a> launched. Coutts pushed back on the idea that the linkage has \u201cbroken,\u201d arguing that, sized to bitcoin\u2019s volatility, the current gap is unremarkable. \u201cWithin the volatility scope of the asset, [there\u2019s] nothing to worry about,\u201d he said, while noting that his own dollar-sensitive proxy has \u201cbeen flatlining for a little bit longer\u201d than some popular versions. The right question, he stressed, is not micromanaging a lag but asking whether liquidity is rising on a multi-quarter view\u2014and why.<\/p>\n That macro lens leads directly to policy. Coutts expects an imminent inflection in Western central-bank posture, with rates likely headed lower and balance-sheet tightening at least tapering. \u201cI think it\u2019s very likely we\u2019ll see interest-rate cuts in the September meeting,\u201d he said.<\/p>\n \u201cThe question is will the Fed also announce the end of QT<\/a> or further tapering of QT?\u201d Behind the pivot, in his view, is \u201cfiscal dominance\u201d: the US government\u2019s outsized deficits and refinancing needs compelling monetary authorities to ensure smooth absorption of Treasury supply. \u201cYou can forget what they tell you about stable prices and unemployment. They are there to hold up the financial system\u2026 and now they are very much tied to the hip of the US government.\u201d<\/p>\n Crucially, Coutts reminded viewers that most money creation comes not from central banks but from commercial banks extending credit. \u201cThey\u2019re responsible for around 85% to 90% of all the new money supply,\u201d he said. In practice, liquidity can be \u201csupercharged\u201d when central banks also expand their own balance sheets or alter regulations to encourage banks to accumulate more Treasuries. He also framed Washington\u2019s friendlier posture toward crypto and stablecoins through this prism, calling dollar stablecoins a potential new distribution rail for US debt. The result is a structural backdrop that, in his view, favors higher liquidity over time even if the near-term path is noisy.<\/p>\n On top of policy, Coutts layered the business cycle<\/a>. He argued that the US is edging back into expansion\u2014with recent ISM readings above 50 cited during the discussion\u2014and that the \u201cGoldilocks\u201d setup emerges when an upturn in growth overlaps with a turn higher in liquidity. This, he suggested, is the deeper driver behind the familiar four-year bitcoin rhythm: \u201cAre we really looking at a liquidity cycle that\u2019s dressed up as a bitcoin halving cycle?\u201d As issuance declines over successive halvings, he said, the supply-shock effect becomes \u201cless significant,\u201d while liquidity and growth conditions dominate allocations to \u201canti-debasement assets.\u201d In that race, he added, \u201cBitcoin is the emergent anti-debasement asset of the present and the future,\u201d with Ethereum alongside it on longer-horizon performance.<\/p>\n China features prominently in Coutts\u2019 map. He highlighted the People\u2019s Bank of China\u2019s rising balance sheet amid a property-led debt deflation and the government\u2019s push to revive risk assets. \u201cThey\u2019re really the only central bank that\u2019s going up,\u201d he said, linking that liquidity to improving Chinese equities and surging gold in yuan terms. In prior cycles, he noted, late-stage bitcoin strength lined up with Chinese equity peaks, and he currently sees \u201can inverse double head-and-shoulders\u201d pattern pointing to roughly 5,100 on a key China equity benchmark. Two cycles are not \u201cstatistically significant,\u201d he conceded, but the mechanism is straightforward: \u201cWhat\u2019s driving Chinese equities, what\u2019s driving bitcoin? The same thing\u2014it\u2019s liquidity.\u201d<\/p>\n If the structural message is supportive, the tape still demands humility. Coutts called out a weekly-timeframe bearish divergence in bitcoin\u2019s momentum as a genuine risk signal. \u201cDivergences are warning signals\u2026 The trend is losing momentum,\u201d he said, recalling similar set-ups ahead of the 2008 crisis and the 2020 pandemic shock. Such signals are probabilistic, not fate, but he urged investors to consider \u201ccountervailing circumstances\u201d and risk-management overlays rather than dismissing them.<\/p>\n Why This Bitcoin Cycle is DIFFERENT! (Explained by @Jamie1Coutts<\/a>)<\/p>\n Timestamps: \u2014 Crypto Kid (@CryptoKidcom) September 6, 2025<\/a><\/p>\n Bitcoin Momentum Fades (For Now)<\/p>\nThe Business Cycle<\/h2>\n
\n00:00 Intro
\n01:05 Global Liquidity and M2 Money Supply
\n07:19 Fed\u2019s Balance Sheet
\n14:45 Liquidity Cycles or Halving Cycles
\n19:04 Chinese Equities and Bitcoin
\n23:25 The Bearish Divergences
\n35:08\u2026 pic.twitter.com\/VIuA5BFTyu<\/a><\/p>\n