Michael Howell: 2026 Unlikely to Be a Strong Year for Bitcoin, While 30‑Year Treasury Yields Expected to Rise

According to Michael Howell, Bitcoin tracks wholesale financial market liquidity rather than conventional M2.

Howell said that AI capital expenditure and a large U.S. deficit caused Bitcoin’s recent price drawdown.

He expects the global liquidity cycle to bottom around mid‑2027, giving Bitcoin room to grow later.

Liquidity Crowded Out

Howell attributed poor performance in Bitcoin, Ethereum, and other cryptocurrencies to declining global liquidity, driven by the AI capital‑expenditure boom and a federal deficit near 6% of GDP, rather than Federal Reserve tightening.

Roll Over Risk Building

Howell forecasts nominal GDP growth of 6‑8% and believes the 30‑year Treasury yield could reach 6%, a level that could constrain borrowing and refinancing.

He noted that the previous tipping point was around 5.5‑6%, beyond which economic growth could slow. However, he admitted uncertainty about the exact threshold.

Bills Fund The Deficit

He highlighted that the Treasury has shifted issuance toward short‑term bills, which now represent about 22% of outstanding Treasuries, up from roughly 30% two decades ago. Monetizing this could weaken the dollar and support gold and crypto.

He added that the rise in gold since mid‑2022 was mainly driven by liquidity injections from the People’s Bank of China, not Western buying.

Why Bitcoin May Not Have A Big Year In 2026

Howell said the 65‑month global liquidity cycle, tied to average global debt maturity, should bottom around the middle of 2027, which is why he does not expect 2026 to be a strong year for Bitcoin. He added that “Bitcoin is behaving exactly as Bitcoin should perform.”

Bitcoin was trading around $77,000, while on Stocktwits it remained in the “extremely bullish” zone with high chatter levels.

Howell’s comments coincided with the U.S. Treasury’s announcement of a bond buyback, which the market viewed as a liquidity‑positive signal.

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