The speculation phase of the liquidity cycle typically lasts between nine and twelve months and favors commodity investments over credit

Overview Debates Related claims Topics

Bitcoin functions as a long-duration asset that exhibits high sensitivity to changes in United States Treasury yields

Bitcoin's sensitivity to shifts in global liquidity has historically measured approximately five times greater than gold's sensitivity

The calm phase of Michael Howell's liquidity cycle coincides with an economic recession and favors allocating to equities and commodities over bond duration

Financial market liquidity conditions tighten when the yield curve flattens and credit spreads widen

Global liquidity expanded at an annualized compounding rate slightly above 8.5% between 1971 and 2026

Global liquidity moves in cyclical waves lasting five to six years

The turbulence phase of the liquidity cycle coincides with peak economic growth and favors allocations to bond duration

The rebound phase of Michael Howell's liquidity cycle coincides with slowing economic momentum and equity market outperformance led by technology stocks

Six-week changes in People's Bank of China liquidity lead changes in dollar-denominated gold bullion prices by approximately two months

A 10% expansion in global liquidity historically produces a 12% to 15% increase in global gold prices

When the global liquidity cycle is declining, the global real economy typically experiences accelerating growth

Michael Howell's macroeconomic liquidity model consists of four distinct phases: rebound, calm, speculation, and turbulence

The global liquidity cycle historically leads the real economic cycle by an average of approximately 18 months

Gold prices appreciated at an annualized compounding rate slightly above 8.5% between 1971 and 2026

Global financial liquidity cycles and real-world business confidence cycles move counter-cyclically against each other

Global gold bullion prices commenced a major upward price trend in United States dollar terms in early 2022

Zeus Research analyst Dominick John stated that Federal Reserve rate-hike fears weigh on broader risk appetite and generate selling pressure that absorbs Bitcoin ETF buying

Persistent U.S. inflation, with the consumer price index rising 3.7% in the 12 months through September 2026, sustained investor expectations of additional Federal Reserve interest rate increases

Under the baseline statistical model in an October 13, 2026 Bank for International Settlements paper by Iñaki Aldasoro and Rashad Ahmed, a one-basis-point increase in U.S. bank deposit rates reduced average 10-week stablecoin market growth from 15% to 12%.

When estimating the statistical relationship, the BIS study's authors controlled for federal funds rates, U.S. Treasury yields, dollar movements, Bitcoin prices, and stock market volatility.