The Global Liquidity Index (GLI) aggregates central bank balance sheets, M2 money supply, and cross-border capital flows into a single indicator. It is a core macro variable tracked for bull and bear markets across Bitcoin, equities, gold and commodities (sources: Fed/ECB/BoJ/PBoC balance sheets, global M2, cross-border flows; updated daily where published). Past performance does not guarantee future results.
Composite index (Central bank balance sheets + M2 + cross-border flows)
The Fed, ECB, BoJ and PBoC collectively manage $28T+ in assets. When they expand via QE, they inject liquidity into the financial system directly.
Global M2 — the broadest measure of money supply including deposits and money market funds — has grown from $40T (2008) to over $108T (2026).
Dollar-denominated lending, Eurodollar markets, and currency swap lines determine how much liquidity flows between countries and into risk assets.
MacroView formula: GLI = (Fed + ECB + BoJ + PBoC balance sheets) + Global M2 YoY change + USD cross-border flow index. Normalized to 100 = 2015 baseline.
Global liquidity is a consistently influential force in financial markets, alongside corporate earnings, technical patterns and geopolitical events. When central banks inject money into the system, this capital has to go somewhere, and it tends to flow across asset classes simultaneously: equities, Bitcoin, gold, real estate, and commodities.
The evidence is notable: several attribution studies (e.g. Goldman Sachs, BCA Research) find that a large share of the S&P 500's total return since 2009 came from P/E multiple expansion rather than earnings growth — the exact share varies by method and window. Bitcoin's +0.82 correlation with global M2 changes is a long-run rolling figure that is unstable and has turned negative in some periods. Most major bull runs since 2009 coincided with liquidity expansion first.
The relationship works in reverse too. The 2022 bear market across every asset class — stocks, bonds, crypto, gold — was caused by the Fed's fastest tightening cycle in 40 years, which drained $1.5T from the financial system in 12 months. Understanding liquidity cycles gives traders a structural edge that no technical analysis tool can provide.