Important Read - Understanding Markets in 2026 by Ainslie Chief Economist

As we move into 2026, global financial markets are undergoing a clear shift. This is not a sudden crisis, but a slow and structural change driven by falling liquidity and a loss of confidence in long-standing financial backstops. 

Liquidity Is Declining - By Design 

The velocity of global liquidity peaked in late 2025 and has been trending lower since. Importantly, this is not because central banks are aggressively tightening. Most remain accommodative. Instead, capital is being redirected away from financial markets and towards the real economy - infrastructure, energy, manufacturing, and supply resilience. 

Historically, when economic growth strengthens, liquidity available to financial markets often declines. Money gets used productively rather than speculatively. That transition tends to create volatility, particularly for assets that rely on abundant liquidity to perform. 

In short: the economy can grow while markets struggle. 

Bond Markets Are Sending Mixed Signals 

Government bond markets reflect this change. Yield curves across the US and Europe are flattening, signalling slower financial growth and tighter conditions ahead. Japan is seeing the opposite - rising yields after years of suppression - highlighting growing stress beneath the surface. 

China stands apart. With deflationary pressures and ongoing stimulus, liquidity there is increasing and flowing into commodities and physical assets rather than financial markets. 

This creates a two-speed world: 

• The West is tightening financially 

• The East is easing 

That split is undermining the idea of a coordinated global policy response and increasing the risk of sudden repricing across markets. 

Risk Assets Are Losing Their Anchors 

Equities and cryptocurrencies have benefited for years from low rates and predictable policy support. As confidence in perpetual central-bank intervention fades, those assets are becoming more volatile. 

This does not mean collapse - but it does mean adjustment. Risk assets are repricing as investors reassess what truly underpins value in a less liquid world. 

Bitcoin’s recent weakness fits this pattern. Short-term price movements are being driven by market structure and ETF flows, not by a failure of its underlying proposition. Its core appeal - scarcity, independence from sovereign control, and minimal trust requirements - remains intact. 

Gold Is Re-Establishing Its Role 

Gold’s strength goes beyond inflation protection. It is increasingly being treated as foundational collateral - an asset that sits outside political and financial systems. 

Rising demand from China, central banks, and private investors reflects a broader search for assets that do not rely on institutional credibility. In a world where trust is being repriced, gold’s neutrality matters. 

Silver is feeling both pressures! 

Silver is riding a wave of both rare monetary metal demand in the same sense as gold, combined with massive demand (particularly from the east) due to that same real economy expansion in high demand uses such as renewable energy and electronics. This is on top of an existing silver supply deficit and after years of suppressed prices. 

Investor Positioning Reflects Caution 

Globally, investors are reducing exposure to US risk assets after a long cycle of dominance. Cash levels are rising, technology and credit exposure is being trimmed, and allocations to commodities, energy, and hard assets are increasing. 

This is classic late-cycle behaviour - defensive, selective, and focused on resilience rather than yield. 

What This Means Going Forward 

This transition is unlikely to happen all at once. It will unfold in stages: 

• Pressure on government credibility disrupts bond markets 

• Capital moves away from trust-dependent assets 

• Financial infrastructure splits between legacy systems and on-chain alternatives 

• Capital increasingly seeks assets that require minimal trust 

In this environment, structure matters more than asset class. Assets anchored in real value and scarcity are favoured over those dependent on policy stability and leverage. 

The Core Takeaway 

Liquidity now determines when to act. 
Trust determines what to own. 

That is the lens through which markets should be viewed in 2026 - and why physical bullion and decentralised hard assets are once again taking centre stage. 

Chris Tipper  
Chief Economist & Strategist 
x.com/TipperAnalytics