This chart illustrates the year-over-year growth in the global money supply (M2) from the top 21 central banks, compared to the price of Bitcoin. The M2 Global measure includes cash, checking and savings deposits, money market accounts, and smaller deposits under $100,000.
An increase in global liquidity indicates that major central banks are making more money available to their economies. They typically achieve this by lowering interest rates or purchasing government bonds and other securities to expand the money supply.
Bitcoin vs. Global M2: This correlation has behaved like clockwork, especially over the past two years.
Predictive Power: M2 often leads. The M2 correction in late 2024 preceded Bitcoin’s fall from $110K to $78K. That’s a valuable alpha-generating insight.
Mirrored Movements: Even across market cycles, bear or bull, the synchronicity hasn’t broken. That's rare in macro models — they often fall apart in extremes, but this one hasn't.
What’s Next? – A Mega Bull Reversal?
Absolutely possible — and your data points toward it. Let’s break it down:
Current M2: ~$108 Trillion
Projected M2: ~$127 Trillion (That's ~18% growth)
Policy Environment: Global easing is back on the menu. The Fed, ECB, PBoC, and even BoJ are leaning dovish or at least pausing hawkishness.
Liquidity = Risk-On: As more liquidity floods the system, Bitcoin historically benefits, especially when paired with strong narratives like ETF adoption, institutional allocation, or geopolitical instability.
Extra Layer: Valuation through M2 Lens
If Bitcoin only tracks M2 growth (which it won’t — it’s also reflexive, speculative, and narrative-driven), here’s a very rough ballpark:
BTC ATH in 2024: ~$110K
Global M2 then: ~$108T
Global M2 projected: ~$127T
Now factor in reflexivity (speculation tends to overshoot) and supply constraints (post-halving). That $129K that it predicts it could easily become $150K or more during a hype-driven bull market.
** Key Triggers to Watch**
Sustained M2 expansion: Is it accelerating or stalling?
Rate cuts or QE announcements: Especially from the Fed and ECB.
BTC spot ETF flows: More liquidity channels → higher price floors.
Stable macro (no shocks): Bitcoin loves smooth liquidity trends.
Retail re-entry + narrative momentum.
If M2 continues to expand toward $127T, history suggests Bitcoin will not sit still.
But What About the stocks and Tariffs?
If this continues, these 3 major U.S. companies could feel the pain:
A. Starbucks
→ 19% of all Starbucks stores are in China. A slowdown could bite their growth.
B. Intel
→ 29% of Intel’s revenue comes from China. That’s a massive exposure for a company already facing challenges.
C. Tesla
→ 21% of Tesla’s revenue is from China, and over 50% of their EVs are made there.
These are not minor numbers. If tariffs stick, these companies could be in for some serious margin pressure.
Posted Using INLEO
