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Is the Bitcoin Liquidity Supercycle Starting? Here’s What a Top Hedge Fund CEO Says
On the brisk morning of July 14, Bitcoin shattered records by soaring above $122,000, marking a significant 16% increase in its month-long rally. In light of this, Charles Edwards, the founder and CEO of Capriole Investments, suggests that we are just witnessing the beginning of a far-reaching liquidity surge poised to shape the market landscape through 2025 and beyond.
According to the latest insights from the Capriole newsletter, Edwards explains that the current surge in Bitcoin’s value is not a mere coincidence but the result of a well-orchestrated liquidity framework where Bitcoin Treasury Companies play a crucial role. He highlights that, contrary to beliefs that the recent $20,000 jump was accidental, it is actually backed by prolonged macroeconomic trends.
Edwards points out a significant trend in market behavior where major Bitcoin rallies have historically coincided with net short positions on the USD. This pattern is underscored by Capriole’s “USD Positioning” gauge, which has shown a stark negative outlook since the early summer, indicating a strong global shift away from the dollar towards more tangible assets.
Another cornerstone of this bullish phase is the tightening spreads in BBB-rated corporate bonds, a traditional indicator of risk appetite in markets, which has closely mirrored Bitcoin’s positive trajectory since 2020. This correlation further solidifies Bitcoin’s stature as a traditional financial (tradfi) asset.
Moreover, the unprecedented expansion of the global M3 money supply, growing at an annualized rate of nine percent, has previously aligned with substantial Bitcoin returns. Despite Bitcoin’s current multi-trillion-dollar market cap, which may moderate future gains, Edwards remains optimistic about the potential for significant growth.
Additionally, historical data showing a lead-lag relationship between gold breakouts and subsequent rises in Bitcoin value lends further credibility to the current market dynamics. With gold having surged early in 2025 and outperforming global equities, it supports a diminishing reliance on fiat money and a shift towards hard assets.
Recent market indicators from the New York Stock Exchange and adjustments in Capriole’s “Equity Premium” indicator also reflect a robust appetite for risk, feeding into the firm’s comprehensive Bitcoin Macro Index which still shows vigorous growth potential.
A particularly intriguing aspect of this cycle is the rise of Bitcoin Treasury Companies—entities that leverage fiat capital to invest in Bitcoin. These firms have seen quarterly inflows reach $15 billion, with at least 145 companies actively engaging in this strategy, potentially adding over $1 trillion to Bitcoin’s market cap in the coming year.
In conclusion, Edwards underscores that despite potential pullbacks, the foundational market drivers such as liquidity, risk sentiment, and on-chain activity remain intact, heralding the start of a Bitcoin liquidity supercycle. This cycle is not just about speculative gains but a strategic positioning for Bitcoin’s future as a base currency, necessitating massive scale-up through institutional acquisitions.
For more insights into this burgeoning trend, consider visiting Binance for detailed analyses and updates on Bitcoin’s market movements. At the time of reporting, Bitcoin stands impressively at $122,438, signaling strong market confidence as it enters a new phase of its liquidity-driven journey.
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