WEALTH CYCLES • ADVANCED TOPIC
Debt Refinancing Cycles
The money supply has to grow to service debt. When debt matures, liquidity must expand. Follow the money.
— Macro Principle
When governments refinance trillions in debt, central banks print money. That money flows into assets—including crypto.
Related Content
Reading Time: 30 minutes
Why This Matters
Understanding the debt refinancing cycle helps you predict when governments will print money—and when that money flows into crypto. This pattern has repeated in 2017, 2021, and is setting up again for 2025.
Current Situation
⚠️ MATURING 2025
$9+ Trillion
Largest refinancing year in history
📊 FED RESPONSE
QE Likely
Interest costs +$360B/year
🚀 CRYPTO IMPACT
6-9 Months
Historical lag to bull markets
✅Pattern Tracker: Are We In The Cycle?
Click each item as you observe it happening in real-time. This helps you track where we are in the cycle.
Progress: 0 / 5 signals observed
The Pattern: How It Works
💡 The 5-Step Cycle:
Governments borrowed money years ago. Now they have to pay it back or borrow again—at today's higher rates.
Borrowing costs jump. The government needs more money just to pay interest on existing debt.
Fed, ECB, and Bank of Japan restart "QE" (Quantitative Easing) to ease the pressure. This means creating new money.
M2 money supply grows. That money has to go somewhere—often into assets like property, stocks, and crypto.
Risk assets (including Bitcoin) typically rally 6-9 months after QE starts. This has happened in 2017 and 2021.
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⚠️ Critical Finding: Where M2 Actually Flows
Answering the key question: "Why was 2021 small despite massive M2?" The money went to stocks, real estate, and stayed in cash—not primarily crypto!
M2 Flow Distribution by Cycle
2011
M2 Added: $0.8T
Crypto Gain:
+1850%
Early crypto - high M2 concentration
2013
M2 Added: $0.7T
Crypto Gain:
+6200%
QE3 era - crypto major speculative outlet
2017
M2 Added: $0.6T
Crypto Gain:
+3200%
ICO boom - but stocks competitive
2020-2021
M2 Added: $6.0T
Crypto Gain:
+285%
COVID - Liquidity DILUTED across all assets!
2025 (Proj)
M2 Added: $2.5T
Crypto Gain:
+65%
IF M2 expands - will dilute like 2020-2021?
💡 Critical Insight: The Correlation is WEAKENING
2011-2013: Crypto received 25-30% of new M2 → Massive % gains (+1,850% to +6,200%)
2020-2021: Crypto received only 13-15% of new M2 → Modest % gains (+285%, then +187%)
Why the change?
- • Stocks competitive: S&P +47% attracted M2
- • Real estate boomed: +28% home prices diverted M2
- • Cash hoarding: 50% of M2 stayed in savings (pandemic fear)
- • Market maturity: Larger base = smaller % gains possible
- • Institutional caution: 1-5% allocations, not 50-100%
Implication for 2025:
If M2 expands +8-10%, crypto may receive only 15-20% (~$1.2-1.6T) if pattern continues. This suggests +40-60% crypto gain is more realistic than +120%. Crypto must compete with stocks, real estate, and overcome cash hoarding.
Revised 2025 Scenarios:
Original forecast (+120%) was too optimistic. Base case (+40-60%) more realistic given dilution effect.
2025 Quarterly Breakdown
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Debt Volume vs Bitcoin Growth
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Quarterly Timeline: Debt Pressure → Bitcoin Performance
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Pattern Recognition Heat Map
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Historical Evidence
2017 Bull Run
First major pattern
🔴 Q1 2017: Lots of Debt Due
~$800B refinanced
💧 Fed Printed Money
Balance sheet expanded, rates stayed low
🚀 Bitcoin Exploded
+1,900% by December
$1K → $20K
2021 Bull Run
Pattern repeats
🔴 Q1-Q2 2020-2021: Massive Debt Due
$1.2T+ refinanced
💧 Fed Printed Trillions
COVID QE: $4T → $9T balance sheet
🚀 Bitcoin Exploded Again
+400% by November
$15K → $69K
2025 Forecast
If history repeats...
DEBT COMING DUE
$1.8T in Q1-Q2
Highest on record
LIKELY FED RESPONSE
Print More Money
M2 growth +8-10%
POTENTIAL BTC RALLY
Q3-Q4 2025
6-9 month historical lag
Note: This is educational analysis based on historical patterns. Not financial advice.
Where This Data Comes From
Our Data Sources:
🇺🇸 United States (40% of global debt markets)
Quarterly data from Federal Reserve (FRED), 1966-present. Official government data.
🏦 Federal Reserve Balance Sheet
Shows when the Fed is printing money (QE) or reducing it (QT). Updated weekly since 2002.
₿ Bitcoin Price & Crypto Market Cap
Daily data from CoinGecko, 2013-present. Used to identify cycle phases and correlations.
Why US-only? The US dollar is the global reserve currency. When the Fed prints money, it affects global markets—including crypto.
🔗 Official Sources:
- • Federal Reserve Economic Data (FRED): fred.stlouisfed.org
- • Bank for International Settlements (BIS): bis.org/statistics
- • CoinGecko API: coingecko.com
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Read Guide →Wealth Cycles - Debt Cycles: Complete
- Debt refinancing cycles create predictable liquidity waves that drive risk asset prices (especially crypto).
- Major debt maturity spikes correlate with central bank QE programs, which inject liquidity into markets.
- Understanding these cycles helps you anticipate when capital will flow into risk assets vs. when it will dry up.
Homework
Look at the debt maturity timeline. When is the next major refinancing wave? How might that impact your investment allocation?
Bookmark this page and check the debt maturity heatmap quarterly. Notice the correlation between debt spikes and crypto rallies. Use this as one signal (among many) for your allocation decisions.
What's Next?
20 minutes
Educational Purpose Only
This analysis shows historical correlations between debt cycles and cryptocurrency markets. Past performance does not predict future results. Cryptocurrency markets are highly volatile and speculative. Only invest what you can afford to lose. This is not financial advice. Adrian Tobisch is not a licensed financial adviser. Always consult a qualified professional before making investment decisions.
📚 Data Sources:
Federal Reserve (FRED) | Bank for International Settlements (BIS) | CoinGecko | IMF