Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnSquareMore
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.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

SEC Investigates Crypto Company Connected to Trump for Delayed Disclosures and Management Issues

- SEC investigates Alt5 Sigma over delayed CEO suspension disclosure and $1.5B token swap linked to Trump-backed World Liberty Financial. - Discrepancies in reporting a six-week delay in publicizing Peter Tessopoulos' suspension raise compliance concerns and triggered an 83% stock plunge. - Firm's ties to Eric Trump and $500M transfers to Trump-linked entities amplify scrutiny amid allegations of money laundering facilitation. - Executive dismissals without misconduct claims and governance turmoil highligh

Bitget-RWA2025/11/29 00:26
SEC Investigates Crypto Company Connected to Trump for Delayed Disclosures and Management Issues

Dogecoin News Today: Dogecoin ETFs Struggle to Boost Prices, Underscoring Difficulties in the Altcoin Market

- Dogecoin ETFs (BWOW, GDOG) failed to trigger price recovery, with GDOG's $1.4M day-one volume far below $12M forecasts. - Despite institutional interest in DOGE (7th-largest crypto at $22B), indirect exposure structures lack regulatory protections and face volatility risks. - Technical analysis shows DOGE forming bullish patterns near $0.15, but ETF-driven inflows remain insufficient to break $0.155 resistance. - Altcoin ETFs face uneven reception: Solana/XRP products outperformed DOGE, highlighting chal

Bitget-RWA2025/11/29 00:26
Dogecoin News Today: Dogecoin ETFs Struggle to Boost Prices, Underscoring Difficulties in the Altcoin Market

Uruguay’s Energy Challenges Disrupt Tether’s $500 Million Cryptocurrency Investment

- Tether abruptly ended its $500M Uruguay Bitcoin mining project due to unsustainable energy costs and uncompetitive tariffs. - The project, initially promoted as eco-friendly, faced $4.8M in unpaid bills and regulatory challenges. - The exit highlights risks for crypto miners in regions with volatile energy markets and uncertain policies. - Tether remains interested in Latin American green energy projects despite the Uruguay setback.

Bitget-RWA2025/11/29 00:08
Uruguay’s Energy Challenges Disrupt Tether’s $500 Million Cryptocurrency Investment

Solana News Update: Solana Experiences Sharp Price Drop, Yet Institutional Investments Reflect Confidence in Its Future

- A $239M whale transfer on Solana by Forward Industries to Fireblocks Custody highlights institutional confidence amid SOL's 53% price drop since January 2025. - Upexi's $23M private placement and 40% stock decline underscore crypto exposure risks as institutional Solana ETF inflows hit $420M in November. - CME's Dec 15 SOL/XRP futures launch and Fidelity's staking ETFs signal growing institutional adoption despite Solana's $77.4B market cap decline. - Whale activity and ETF trends suggest strategic long-

Bitget-RWA2025/11/29 00:08
Solana News Update: Solana Experiences Sharp Price Drop, Yet Institutional Investments Reflect Confidence in Its Future