Actual Imaginative and prescient analyst Jamie Coutts argues that the present bitcoin market is being pushed much less by the asset’s four-year issuance cadence and much more by a broadening tide of world liquidity that’s solely now starting to roll. In a wide-ranging interview with “Crypto Child,” Coutts laid out a cycle framework anchored in coverage, financial institution credit score, and balance-sheet dynamics, whereas cautioning that traditional momentum warnings and a cooling of corporate-treasury shopping for warrant respect.

Why This Bitcoin Cycle Is Completely different

“From a first-principles foundation, international liquidity…drives danger belongings,” Coutts stated, including that when he regresses bitcoin in opposition to his most popular liquidity composite—constructed from central-bank stability sheets, international cash provide, FX reserves and components of business/shadow banking—“you discover that there’s explanatory energy.” The hazard, he warned, is over-fitting a shifting relationship. “Markets are non-stationary… The correlation itself is a shifting goal, so I wouldn’t get too tied up in charts the place you’re fine-tuning the lag. That lag interval will change on a regular basis.” Even so, he known as the connection between liquidity and danger “pretty much as good as something I’ve ever seen.”

Associated Studying

The interview opened on a degree of competition in latest months: short-term divergences between rising international liquidity gauges and bitcoin’s worth since US spot ETFs launched. Coutts pushed again on the concept the linkage has “damaged,” arguing that, sized to bitcoin’s volatility, the present hole is unremarkable. “Inside the volatility scope of the asset, [there’s] nothing to fret about,” he stated, whereas noting that his personal dollar-sensitive proxy has “been flatlining for just a little bit longer” than some widespread variations. The fitting query, he burdened, shouldn’t be micromanaging a lag however asking whether or not liquidity is rising on a multi-quarter view—and why.

That macro lens leads on to coverage. Coutts expects an imminent inflection in Western central-bank posture, with charges doubtless headed decrease and balance-sheet tightening not less than tapering. “I believe it’s very doubtless we’ll see interest-rate cuts within the September assembly,” he stated.

“The query is will the Fed additionally announce the finish of QT or additional tapering of QT?” Behind the pivot, in his view, is “fiscal dominance”: the US authorities’s outsized deficits and refinancing wants compelling financial authorities to make sure clean absorption of Treasury provide. “You’ll be able to neglect what they let you know about secure costs and unemployment. They’re there to carry up the monetary system… and now they’re very a lot tied to the hip of the US authorities.”

Crucially, Coutts reminded viewers that almost all cash creation comes not from central banks however from industrial banks extending credit score. “They’re liable for round 85% to 90% of all the brand new cash provide,” he stated. In observe, liquidity might be “supercharged” when central banks additionally broaden their very own stability sheets or alter laws to encourage banks to build up extra Treasuries. He additionally framed Washington’s friendlier posture towards crypto and stablecoins by this prism, calling greenback stablecoins a possible new distribution rail for US debt. The result’s a structural backdrop that, in his view, favors greater liquidity over time even when the near-term path is noisy.

The Enterprise Cycle

On prime of coverage, Coutts layered the enterprise cycle. He argued that the US is edging again into growth—with latest ISM readings above 50 cited throughout the dialogue—and that the “Goldilocks” setup emerges when an upturn in development overlaps with a flip greater in liquidity. This, he steered, is the deeper driver behind the acquainted four-year bitcoin rhythm: “Are we actually taking a look at a liquidity cycle that’s dressed up as a bitcoin halving cycle?” As issuance declines over successive halvings, he stated, the supply-shock impact turns into “much less vital,” whereas liquidity and development situations dominate allocations to “anti-debasement belongings.” In that race, he added, “Bitcoin is the emergent anti-debasement asset of the current and the longer term,” with Ethereum alongside it on longer-horizon efficiency.

China options prominently in Coutts’ map. He highlighted the Folks’s Financial institution of China’s rising stability sheet amid a property-led debt deflation and the federal government’s push to revive danger belongings. “They’re actually the one central financial institution that’s going up,” he stated, linking that liquidity to bettering Chinese language equities and surging gold in yuan phrases. In prior cycles, he famous, late-stage bitcoin power lined up with Chinese language fairness peaks, and he presently sees “an inverse double head-and-shoulders” sample pointing to roughly 5,100 on a key China fairness benchmark. Two cycles will not be “statistically vital,” he conceded, however the mechanism is easy: “What’s driving Chinese language equities, what’s driving bitcoin? The identical factor—it’s liquidity.”

Associated Studying

If the structural message is supportive, the tape nonetheless calls for humility. Coutts known as out a weekly-timeframe bearish divergence in bitcoin’s momentum as a real danger sign. “Divergences are warning alerts… The development is shedding momentum,” he stated, recalling related set-ups forward of the 2008 disaster and the 2020 pandemic shock. Such alerts are probabilistic, not destiny, however he urged traders to think about “countervailing circumstances” and risk-management overlays quite than dismissing them.

Why This Bitcoin Cycle is DIFFERENT! (Defined by @Jamie1Coutts)

Timestamps:
00:00 Intro
01:05 World Liquidity and M2 Cash Provide
07:19 Fed’s Steadiness Sheet
14:45 Liquidity Cycles or Halving Cycles
19:04 Chinese language Equities and Bitcoin
23:25 The Bearish Divergences
35:08… pic.twitter.com/VIuA5BFTyu

— Crypto Child (@CryptoKidcom) September 6, 2025

Bitcoin Momentum Fades (For Now)

Associated to momentum, he flagged a cooling within the marginal demand engine that powered a lot of 2024: corporate-treasury accumulation of bitcoin, led by MicroStrategy and adopted by a protracted tail of imitators. “The marginal purchaser of bitcoin has been treasury firms and ETFs,” he stated, however the “depth of shopping for” by treasury automobiles “peaked in This autumn of 2024.” As premiums compress and capital-markets home windows slim, “they will’t purchase on the identical depth anymore,” which acts as a drag on the margin.

The host famous that MicroStrategy’s market-to-NAV premium had not too long ago been round 1.5%, including that Michael Saylor has steered issuance is way extra engaging above roughly 2.0; Coutts’ broader level was {that a} proliferation of copycats diluted the technique and left many smaller names buying and selling under intrinsic worth—potential acquisition fodder for stronger operators if reductions persist. ETFs, he stated, are a steadier bid however lack the leverage-like reflexivity of fairness issuance.

On “altseason,” Coutts was blunt that this time won’t rhyme with 2021’s helicopter-money mania. He argued that crypto has now discovered product-market match, with higher-quality networks boasting customers, money flows and token-burn mechanics that make sense to conventional allocators, whereas indiscriminate hypothesis fades.

“The brand new patrons are way more discerning. They’re not going to purchase the fifteenth or sixteenth L1, the tenth L2,” he stated, predicting focus in a handful of credible platforms and real-world use circumstances. He hopes the trade will “by no means say the phrase ‘altseason’ once more,” preferring to explain what’s coming as a broader “asset-class bull market” with far larger dispersion. The prior “banana zone,” he added, was a creature of lockdowns and stimulus checks; the “velocity of stimulus is completely different” now, so expectations ought to be, too.

At press time, BTC traded at $112,946.

Featured picture created with DALL.E, chart from TradingView.com