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Bitcoin has diverged from global liquidity trends for the first time, according to new analysis from Capriole Investments, even as institutional demand through ETFs shows renewed strength. Capriole Investments founder Charles Edwards claims Bitcoin’s year-on-year performance stalled through 2025 while the global M2 money supply continued to expand. The shift marks a break from a long-standing correlation.
The observation comes as U.S.-listed bitcoin exchange-traded funds recorded their strongest daily inflows since October, pointing to active capital reallocation despite the divergence.
Edwards cited data comparing Bitcoin’s year-on-year percentage change with global M2 supply growth across major economies. The chart showed Bitcoin flattening while money supply growth persisted.
Historically, Bitcoin tracked global liquidity closely, often rising and falling with changes in money supply. This pattern held across multiple market cycles until the recent deviation.
“This is the first time Bitcoin has decoupled from money supply and global liquidity flows,” Edwards wrote, describing the move as structurally different from past slowdowns.
Edwards attributed the divergence to rising concern over quantum computing threats to Bitcoin’s cryptography. He said the market began pricing this risk in 2025. Quantum machines are theorized to break existing cryptographic standards. Early Bitcoin wallets, especially dormant ones, face higher exposure under that scenario.
Edwards described 2025 as a “Quantum Event Horizon,” meaning the probability of a cryptographic break now exceeds zero before a full network upgrade could occur. Is Bitcoin’s market behavior already adjusting to that risk?
He added that an advanced quantum actor could access old wallets and sell coins, which could pressure prices and weaken trust across the network.
Despite the decoupling, bitcoin ETFs drew $753.7 million in the latest session, marking the strongest inflow since October. Fidelity led with $351 million into FBTC. Bitwise followed with $159 million into BITB, while BlackRock added $126 million into IBIT. Since January, total net inflows have exceeded $660 million.
The rebound followed heavy outflows late last year. Bitcoin ETFs lost $3.4 billion in November and $1.09 billion in December after October’s market downturn. Ethereum-focused funds added nearly $130 million over the past 24 hours. LVRG Research head Nick Rak said the inflows reflect renewed institutional demand after a period of caution.
Meanwhile, Kronos Research CIO Vincent Liu pointed to easing inflation data and regulatory momentum. U.S. CPI data released on January 13 showed slowing price growth, supporting rate-cut expectations from the Federal Reserve.
In parallel, the US Senate Banking Committee is set to vote on a crypto market structure bill. Lawmakers expect amendments, with passage seen as a step toward clearer regulation.
Read More: Crypto Treasury Buying Outpaces BTC Supply 3-to-1, Signaling Structural Demand Shift
Bitcoin has broken its long-standing link with global M2 liquidity as institutional flows return through ETFs. Capriole Investments ties this shift to rising concern over quantum computing risks. Together with regulatory progress and easing inflation, the trend shows markets adjusting capital allocation as Bitcoin enters a new phase of risk assessment.
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