Rising Global M2 Money Supply May Impact Bitcoin Prices

According to Cointelegraph, the increasing global M2 money supply could potentially lead to a significant Bitcoin rally. However, analysts advise caution against making hasty investment decisions based on this emerging signal. Pav Hundal, the lead analyst at crypto exchange Swyftx, emphasized that while the market may not be ideal for betting everything on a quick correction, the central scenario still points to a strong performance in March and beyond. Hundal noted that in typical circumstances, global monetary easing measures serve as a reliable indicator for cryptocurrency trends. Current data indicates that spot buyers are actively participating, and the United States has increased its debt ceiling by $4 trillion. Despite some concerns, Hundal remains optimistic, highlighting that the year-on-year fixed exchange rate for the M2 money supply of the four major central banks reached 3.65% in January, as reported by MacroMicro. Historically, many crypto analysts have observed that a rise in the global M2 money supply often correlates with higher Bitcoin prices, driven by increased liquidity and reduced interest rates. Economist Lyn Alden's research from September 2024 revealed that Bitcoin aligns with global M2 trends 83% of the time. This suggests that changes in the money supply could significantly influence Bitcoin's trajectory. Crypto analyst bitcoindata21 expressed on February 25 that the weakening dollar might positively impact the global M2, potentially benefiting Bitcoin. Similarly, Colin Talks Crypto predicted a significant move for Bitcoin based on the global M2 money supply. Bravo Research, an investment research account, highlighted that the U.S. money supply has doubled over the past decade, suggesting that this liquidity surge could drive Bitcoin's parabolic rise. The discussion comes as Bitcoin's value fell below $90,000 on February 25, marking the first time since November. This drop followed U.S. President Donald Trump's announcement that his planned 25% tariffs on Canada and Mexico would proceed as scheduled, despite an earlier agreement to delay them for 30 days. This article does not provide investment advice or recommendations. All investment and trading decisions involve risk, and readers are encouraged to conduct their own research before making any financial decisions.