2025: Lean Bull, 2026: Fat Bear

┈┈➤ Why Pay Attention to Macro Liquidity?

╰┈✦ The Crypto Pie Is Getting Larger

As always, from 2013 to 2025, the crypto pie has been growing larger, making its dependence on macro liquidity stronger than ever.

This is why we need to pay attention to the Federal Reserve's monetary policy, and even the U.S. government's fiscal policy.

╰┈✦ The Sole Source of Crypto Growth

Cryptocurrencies differ from stocks.

Stocks grow due to corporate profits and liquidity expansion, but for most cryptocurrencies, the primary driver of growth is liquidity expansion.

┈┈➤ 2025: Lean Bull

Although the Fed cut rates three times in both 2024 and 2025, can you believe it? The current Fed interest rate is actually higher than the peak rates in 2018 and 2022.

Due to insufficient liquidity, 2025 experienced a lean bull market. BTC, as a vital organ of the bull, rose but reached only a modest peak.

Altcoins, as less important parts of the bull, were trimmed away.

┈┈➤ 2026: Fat Bear

In 2026, the Fed has stopped balance sheet contraction.

On interest rate policy, the Fed may not cut rates in the first half of the year, or may occasionally do so. In the second half, rate cuts of 2 to 3 times are possible.

On money supply, the Fed may occasionally release some liquidity through other means.

On fiscal policy, the U.S. Treasury's TGA account can inject liquidity into society through government purchases and transfer payments (Social Security, Medicare, unemployment benefits, tax refunds, subsidies, etc.).

In 2025, under the influence of Trump's tariff policy, the Treasury collected approximately $11.8 billion more in tariff revenue than in 2024.

Of course, this liquidity is not enough to reverse the bear market.

But the good news is that 2026 could be a fat bear market.

With marginal growth in liquidity, or at least expectations of such growth, this bear market may be relatively more optimistic.