Matrixport: The US Market Is Entering a New Liquidity Release Cycle, with the Bull Run Expected to Continue Until 2026

According to a report by Jinse Finance, Matrixport has released its weekly report stating that the US market is entering a new cycle of liquidity release. Structural capital support may drive Bitcoin and other risk assets to continue their upward trend, with the rally expected to extend into 2026. The current capital structure and credit environment are quite similar to the early stages of previous bull markets: abundant liquidity, improving credit conditions, and a dovish policy shift, with multiple favorable factors resonating to push asset prices higher. Since the fourth quarter of 2018, the scale of US money market funds has rapidly expanded from $3 trillion to $7.4 trillion, reaching a record high. The current annualized interest income stands at $320 billion, providing significant incremental capital flowing into high-yield assets. Meanwhile, corporate buybacks have also accelerated significantly. Since 2025, announced buybacks have reached $984 billion, with the annual total expected to surpass $1.1 trillion. With volatility at low levels, these funds will continue to flow into US equities and drive up valuations. Our model shows that the Federal Reserve’s rate-cutting pace has lagged behind market expectations for 32 consecutive months. To narrow this gap, a cumulative rate cut of about 62 basis points is still needed in the coming months. Since April 2025, US commercial and industrial loans have increased by a total of $74 billion, indicating early signs of a new credit expansion cycle. Since June, credit spreads have continued to narrow and financing conditions have improved, which historically has been positive for Bitcoin—a trend already reflected in Bitcoin’s price performance. Our model indicates that inflation will gradually fall back to the Fed’s 2% target range, and volatility will converge, providing more policy space for a rate cut in September. Since the “Great American Beauty Act” raised the debt ceiling by $5 trillion, the Treasury has issued a net $789 billion in Treasuries in less than six weeks. This round of large-scale bond issuance coincides with the start of a new Bitcoin rally. Historically, during the Trump-led fiscal expansion cycle, Bitcoin prices often strengthened in tandem with Treasury issuance.