Liquidity Tsunami: Why Crypto Could Be Entering Its Most Explosive Phase

Michael Howell , CEO of CrossBorder Capital, sees the market entering the final—and most profitable—stage of the current liquidity cycle. According to him, we’re not witnessing typical economic growth; instead, rising asset prices are being fueled almost entirely by a global wave of liquidity . This liquidity isn’t tied to GDP performance or business cycles, but rather to the need for governments to refinance massive amounts of debt. With about 75% of financial activity focused on rolling over debt , central banks and financial institutions are pushing fresh liquidity into markets, creating a loop of rising prices, increased collateral, and even more borrowing capacity. For crypto, this is a perfect storm. Howell believes we’re now in the “speculation phase” , where high-growth assets like Bitcoin and Ethereum historically perform best. As investors pour into these riskier sectors and yield curves steepen, signs are pointing to a classic late-stage rally. He expects this to lead to a blowoff top , characterized by steep, sudden surges—especially in assets most sensitive to liquidity. The recently passed Genius Act could add even more fuel. By requiring stablecoins to hold large amounts of U.S. government securities, the act gives the Treasury a new funding channel while boosting crypto liquidity. If stablecoin circulation grows from $250 billion to several trillion as predicted, that would supercharge trading volume and capital flows into Bitcoin and Ethereum . In short, both liquidity models and market psychology (as echoed by Raoul Pal’s “banana zone” thesis) are flashing the same signal: a vertical crypto move is coming. Investors watching from the sidelines may want to pay close attention— the cycle isn’t ending; it’s going parabolic .

Source: Coinpaprika