Why Did Bitcoin Plunge 50% Despite a Global Liquidity Surge?

Despite a roughly $5 trillion increase in global liquidity over the past four months, bringing the total to nearly $190 trillion, Bitcoin's price has fallen nearly 50% from its all-time high, sparking widespread market discussion. Chris Tipper, chief economist at Ainslie Group, points out that this divergence is not accidental but stems from a structural differentiation in the sources of liquidity.

In China, due to strict restrictions on cryptocurrency trading, the new liquidity has not flowed into Bitcoin but is concentrated in gold reserves, domestic infrastructure construction, and the real economy. This means that the simple logic of "global liquidity = Bitcoin price" in the traditional sense does not hold. What truly affects Bitcoin's trend is the pace of monetary easing in Western economies.

Data shows that Western liquidity peaked in October last year and has continued to slow down, while Bitcoin's price trend has also entered a correction phase in sync. At the same time, the gold market, driven by strong Chinese demand, hit a record high at the end of January this year and is still hovering near high levels. The contrasting performance of the two assets under the same macro data precisely confirms the existence of the liquidity "fork" effect. Tipper believes that as long as the Federal Reserve restarts its easing policy in the future due to market volatility, a weakening dollar, or sudden financial pressure, Western liquidity will accelerate again, and Bitcoin is expected to start a new round of upward cycle. Recently, Bitcoin quickly rebounded to around $68,500 after falling below $67,000, showing that the market still has strong resilience, and short-term fluctuations may be a brewing stage for a long-term trend.