Business Cycle · Liquidity
Is money being added to the system faster or slower? Fed liquidity and M2 vs Bitcoin
Fed Net Liquidity YoY % vs Bitcoin· weekly
Green zones = liquidity growth accelerating • Red = decelerating • The line ends at the last published figure
Fetching Fed balance sheet...
How it works
Data: Fed Net Liquidity = FRED WALCL − WTREGEN − RRPONTSYD (weekly, next-day) • US M2 = FRED WM2NS (weekly, ~5 weeks late) • Global M2 = US + ECB + Bank of Japan + Bank of England M4 in USD • Bitcoin: Kraken
What is the Business Cycle · Liquidity tracker?
It follows the liquidity cycle that drives Bitcoin and other risk assets through three sources: Fed Net Liquidity (the Federal Reserve balance sheet minus the Treasury General Account and overnight reverse repo), US M2 money supply, and Global M2 — the combined M2 of the United States, euro area, Japan and the United Kingdom converted to US dollars.
Accelerating vs decelerating liquidity
For each source the tracker computes year-over-year growth and the impulse — growth now minus growth three months earlier. When the impulse rises above +0.5 percentage points the regime turns accelerating; below −0.5 it turns decelerating. The buffer stops the signal from flickering when growth hovers around zero.
Why not simply watch the M2 growth level?
Because history says the level misleads. The only stretch of negative US M2 growth, in late 2022 and 2023, coincided with Bitcoin's cycle bottom and was followed by some of its best returns. What separated strong and weak periods for BTC was whether liquidity growth was speeding up or slowing down, and Fed Net Liquidity showed that most clearly.
How honest is the track record?
All statistics are computed live from the data since 2014. Each week only uses figures that had already been published — US M2 appears about five weeks late, euro-area and UK money data about two months late — and every result is shown next to the always-long baseline. Weekly windows overlap, so use the regime as a macro tilt for the coming weeks and months, not as a trade entry.