Key Growth Drivers:
- Rising global liquidity from U.S. Treasury actions and China’s policy shift
- Structural liquidity wave, not temporary boost
- Crypto as “high beta” assets sensitive to liquidity flows
- Crypto market cap projected above $10 trillion by 2026
- Entering “banana zone” — exponential growth period
💧 Quiet Rise in Global Liquidity
Global liquidity is quietly climbing again, and that could change everything for crypto markets. According to experts Michael Howell and Raoul Pal, this shift could trigger the next major bull run in digital assets like Bitcoin and Ethereum.
Michael Howell, a global liquidity analyst, sees signs of a structural liquidity wave forming. This trend is fueled by:
- U.S. Treasury’s drawdown of its cash reserves
- China’s aggressive monetary easing
- Including yuan devaluation—especially against gold
🏗️ Structural, Not Temporary Shift
Howell argues this isn’t just a temporary boost but a long-term shift supported by:
- Growing fiscal pressures
- Rising debt levels
- Fundamental changes in monetary policy
🚀 Crypto Enters “Banana Zone”
Raoul Pal agrees but zooms in on crypto. He believes crypto assets are highly sensitive to liquidity changes, acting as “high beta” investments that react strongly to money flowing into global markets.
Pal predicts we are entering the so-called “banana zone” — a period of exponential crypto gains sparked by:
- Liquidity flows
- Shifting narratives
- Returning retail investors
📊 Trillion-Dollar Projections
Pal’s models suggest crypto market cap could more than triple by 2026, potentially surpassing $10 trillion.
Current Context:
- Markets already showing liquidity sensitivity signs
- Fiscal pressures creating structural support
- Major economies’ monetary policy becoming more accommodative
🌊 Structural Wave Building
Experts emphasize this isn’t a typical cyclical upturn. The combination of U.S. Treasury actions and China’s aggressive policy creates a fundamental shift in global liquidity that could sustain crypto assets long-term.
Bottom Line: Rising global liquidity driven by U.S. Treasury drawdowns and China’s monetary easing may create the perfect storm for explosive crypto growth, with experts predicting market cap could exceed $10 trillion by 2026 as we enter the “banana zone” of exponential gains.