How debt changed the crypto timeline ⏳

I talked about liquidity as the secret sauce of the bull market and one of the key reasons this cycle has taken longer than many expected. Today, I want to go one layer deeper and explain why liquidity stayed tighter in the first place. I’m talking about debt.

To understand where we are now, let’s rewind a little to the aftermath of the 2008 financial crisis.

From 2009 to 2021, interest rates were extremely low. Money was cheap, borrowing felt easy and servicing the debt felt manageable across most of the system. In that environment, governments, corporations and households took on more and more debt, because it didn’t feel like a problem at the time.

Eventually, that added up to over $300 trillion.

Then inflation arrived.

After years of low rates and heavy stimulus, rising prices became impossible to ignore and central banks had to shift direction and bring it under control again. They did this by raising interest rates aggressively, from near zero to over 5%. This suddenly made refinancing trillions of dollars in maturing debt much more expensive, draining liquidity from markets. Much of the global economy shifted into survival mode, so rather than paying debt down, it was simply rolled forward. In fact, around 75% of bond activity became refinancing existing debt, not reducing it.

This would be like constantly refinancing a credit card instead of paying off the balance. Each time the balance comes due, new debt replaces the old. So the problem gets deferred. It doesn’t disappear.

This is a big reason timelines felt confusing, and why crypto didn’t follow the historical patterns many investors expected. While it often moves differently than traditional assets, crypto still rides broader financial conditions – like liquidity squeezes from debt rollovers.

So where does that leave us for 2026?

Well, analysts are expecting a very large wave of U.S. debt refinancing, estimated at $7–10 trillion (or $12–15 trillion including broader needs), peaking mid-year. This could trigger Fed support and fresh liquidity injections (tailwinds we’ve seen fuel crypto rebounds before).

Extended periods like this are often the most uncomfortable part of a crypto journey because they test our patience and conviction. This is where boredom and frustration tend to cause more mistakes than fear ever did.

However, they also offer us something incredibly valuable – more time to learn, refine our strategies and position for what comes next.