Crypto analyst Matt Hughes argues that the global liquidity cycle is extending well beyond its usual rhythm and that this extension is why maintaining the structurally bearish trend in cryptocurrencies has been so punishing since 2020. Hughes, who publishes as The Great Mattsby, said on Monday that the cycle is “currently about 6 years after 2020 with no clear peak in sight in early 2026,” calling the move something closer to a supercycle than standard Expansion 4–6 years.

What does this mean for the cryptocurrency market

Hughes core law is that the established mechanism that ends liquidity cycles, central bank contraction, is weakened by a combination of debt math, piecemeal global money creation, and a capital-intensive investment boom that continues to draw liquidity back into risky assets rather than allowing it to run out.

“The current global liquidity cycle is on track to become the longest on record, exceeding the typical 4-6 year patterns we have seen in the past. Here’s why it is turning into a true supercycle (currently about 6 years after 2020, with no clear peak in sight in early 2026):” wrote Hughes before presenting the macro pillars of his work.

First, Hughes points to the scale of leverage in the system as a limitation to standardization. “Global debt/GDP > 350% creates a refinancing nightmare,” he wrote, arguing that any policy response must be broader to prevent default, and that aggressive tightening risks a cascade of stresses in sovereign and emerging markets. Within this framework, policymakers are locked into a “continuous support mode” that delays the kind of decline that would normally signal the end of liquidity growth.

Second, Hughes argues that the cycle can last longer because global liquidity is no longer dominated by one central bank. “The old dollar-only world is fragmenting,” he wrote, describing a “bifurcation of the global monetary system” in which liquidity creation outside the United States can offset periods when the Federal Reserve is tighter. According to him, the multipolar system – which includes “BRICS countries”, China as a major credit creator and alternative stores of value including “yuan, gold and cryptocurrencies” – makes the whole system more resilient than previous cycles, which were more synchronized.

Third, Hughes links the persistence of the cycle with an unusually enormous wave of demand for capital. He calls artificial intelligence, renewables, data centers, chip factories and blockchain “capital hogs,” arguing that the scale of financing requires “demand and absorption of infinite liquidity.” He also ties it directly to market behavior, writing that risky assets such as “IWM small-caps, ARKK innovations, BTC” heading towards or near all-time highs follow a cycle that is “closer to the beginning than the end.”

Finally, Hughes emphasizes the policy focus on preventing economic downturns. He described central banks as “overly proactive,” citing tools such as forward thinking and yield curve control, as well as tighter fiscal-monetary coordination. He also argued that geopolitical priorities of reshoring, infrastructure and energy transition are strengthening the pro-stimulus stance, while established recession signals are less reliable, pointing to a record 10-year/3-meter inversion “without a collapse.”

Not everyone in the thread accepted the suggestion that the liquidity push remains purely supportive. The user posting as zam signaled short-term risks: “My concern is that Michael Howell says that liquidity dynamics are slowing significantly and that liquidity will peak very soon in this cycle. Any thoughts on this?” Hughes’ response was succinct: “It could evolve into other assets as long as the economy is strong.”

In the case of cryptocurrency markets, the exchange captures a key tension: whether cycle length is the dominant story or whether a slowing liquidity pulse changes the scenario through rotation rather than a complete collapse. Hughes leaves the question of timing open, asking observers whether a crypto peak will come “in late 2026 or even later,” while suggesting that bears may need a more pronounced, system-wide liquidity recovery, rather than just a slower pace, before the macro backdrop turns decisively.

At press time, the total market capitalization of cryptocurrencies was $2.95 trillion.

Featured image created with DALL.E, chart from TradingView.com