Bitget App
Trade smarter
MarketsTradeFuturesEarnSquareMore
Stablecoins, Not Global Liquidity, Now Drive BTC’s Market Momentum

Stablecoins, Not Global Liquidity, Now Drive BTC’s Market Momentum

DailyCoinDailyCoin2025/11/28 19:08
By:DailyCoin

A new analysis from on-chain intelligence firm CryptoQuant suggests that one of the crypto market’s most widely followed macro indicators is losing its predictive power. Instead of looking at global money supply, analysts say investors should watch stablecoin issuance — a metric that has quietly climbed to record levels in 2025.

The World Is Increasing Liquidity Again — But the Real Signal Comes From Stablecoin Supply

“With supply at record highs in 2025, underlying buying power continues to build — making it one of the most important indicators for Bitcoin’s next moves.” – By @xwinfinance pic.twitter.com/YACIuOLc9l

— CryptoQuant.com (@cryptoquant_com) November 28, 2025

For years, traders tracked global M2 growth as a proxy for Bitcoin’s potential upside. During the 2020–2021 liquidity surge, the relationship made sense: soaring money supply aligned with Bitcoin’s historic bull run. 

Sponsored

But according to CryptoQuant, that statistical correlation has weakened sharply, averaging just 0.5 over the past five years. And during tighter policy phases, particularly in 2022 to 2023, Bitcoin increasingly moved independently of M2.

The shift comes as major economies once again move toward easing. Expectations of Federal Reserve rate cuts, fresh stimulus in China, and new funding programs in Europe are all expanding global liquidity. But CryptoQuant argues that these macro shifts now create only a broad backdrop, which is not a reliable signal for Bitcoin’s next move.

Instead, the real driver may be coming from inside the crypto ecosystem. CryptoQuant data shows the ERC-20 stablecoin supply has surpassed $160 billion, the highest level on record. 

“Money supply sets the macro background, but it does not reliably predict BTC price,” says the report. “ A far more accurate, real-time indicator is Stablecoin Total Supply.

Analysts say stablecoin supply matters as it fuels trading and DeFi activity, reacts faster than traditional liquidity data, mirrors institutional and ETF flows, and in both 2021 and 2024–2025 consistently moved ahead of Bitcoin’s upside.

The firm notes that when stablecoin supply picks up, market liquidity strengthens, but when that growth slows, crypto momentum quickly cools.

Why This Matters

Record-high stablecoin supply is emerging as the clearest real-time gauge of market liquidity, offering a stronger signal for Bitcoin’s direction than traditional global money metrics.

Stay in the loop with DailyCoin’s top crypto scoops today:
Shadowy $225M XRP Coin Move Fuels Fresh Theories
Bitwise Drops DOGE ETF: “We Weren’t Expecting Launch”

People Also Ask:

What is stablecoin supply?

Stablecoin supply refers to the total amount of dollar-pegged digital assets — like USDT or USDC — circulating on the blockchain. It represents how much ready-to-deploy capital is available in the crypto ecosystem.

Why do analysts watch stablecoin supply?

Stablecoins act as the main liquidity source for trading, lending, DeFi protocols, and derivatives. When supply grows, it often signals new money entering crypto.

How is stablecoin supply different from global M2?

Global M2 tracks traditional money supply across economies and updates slowly, often monthly or quarterly. Stablecoin data updates in real time, offering a more immediate view of investor flows.

Do institutions affect stablecoin supply?

Yes. ETF flows, OTC desks, and large crypto allocators increasingly use stablecoins, making supply trends more tied to institutional activity.

DailyCoin's Vibe Check: Which way are you leaning towards after reading this article?
Bullish Bearish Neutral
Market Sentiment
0% Neutral
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

You may also like

Bitcoin News Update: Traditional Finance Tightens Grip: MSCI Faces $8.8B Crypto Withdrawal Risk

- MSCI plans to exclude firms holding over 50% crypto assets from major indexes starting January 2026, risking $8.8B in potential sell-offs if adopted widely. - MicroStrategy (MSTR), holding 90% of assets in Bitcoin , faces forced institutional sell-offs as the most exposed company under the proposed rule. - Institutional investors show divided reactions: FourThought increased MSCI stakes while Prudential cut holdings by 59.6% amid governance debates. - JP Morgan's $2.8B MSTR outflow estimate triggered soc

Bitget-RWA2025/11/29 17:52
Bitcoin News Update: Traditional Finance Tightens Grip: MSCI Faces $8.8B Crypto Withdrawal Risk

Regulators Adjust Cryptocurrency Regulations as International Standards Address Gaps

- UK expands CARF to include domestic crypto transactions by 2026, aligning with OECD standards to close compliance loopholes and prevent "off-CRS" classification. - GeeFi's 80% presale completion with 700+ investors highlights its multi-chain wallet utility, contrasting speculative projects like Avalanche's volatile price forecasts. - Global regulators tighten crypto oversight (South Korea's cold wallet seizures, Spain's 47% gain tax), favoring utility-focused projects like GeeFi that prioritize complianc

Bitget-RWA2025/11/29 17:52
Regulators Adjust Cryptocurrency Regulations as International Standards Address Gaps

Dogecoin News Today: With ETFs Driving Meme Coin Growth, Institutional Support is Transforming the Future of Altcoins

- Avalanche (AVAX) gains institutional traction as Securitize secures EU approval to deploy its digital-asset platform on the blockchain, enabling cross-border trading via Avalanche's scalable infrastructure. - Dogecoin (DOGE) surges 2.2% post-Grayscale ETF launch, generating $1.5B trading volume and signaling growing institutional interest in meme coins despite structural limitations. - Litecoin (LTC) approaches key $97.33 resistance, with analysts predicting a potential 33% rally if it breaks out of a co

Bitget-RWA2025/11/29 17:52
Dogecoin News Today: With ETFs Driving Meme Coin Growth, Institutional Support is Transforming the Future of Altcoins

Solana News Update: CoinShares Withdraws from U.S. Altcoin ETFs, Shifts Focus to Thematic Approaches as Major Players Take Lead

- CoinShares exits U.S. altcoin ETF market for Solana , XRP , and Litecoin , shifting focus to thematic crypto strategies amid institutional dominance. - CEO cites 90% inflow capture by giants like BlackRock , leaving smaller firms disadvantaged in saturated U.S. crypto ETF landscape. - Strategic pivot aligns with $1.2B SPAC merger plans and aims to leverage $10B AUM for cross-asset, active strategies targeting institutional investors. - Market analysts note the move could reshape ETF competition, emphasiz

Bitget-RWA2025/11/29 17:52
Solana News Update: CoinShares Withdraws from U.S. Altcoin ETFs, Shifts Focus to Thematic Approaches as Major Players Take Lead