M2 Money Supply growth Crypto Coins If you examine the most important indicator and past cycles in detail, you will see it clearly. When you leave back short -term developments, politics and much more, what you need to look at is the speed of the increase in M2 money supply and stability. It is very important for crypto currencies.
M2 Money Supply and Bitcoin
Bitcoin (BTC) $83,255.23 And the performance of crypto currencies in a wider frame is directly associated with M2 money supply. In the graph below, you see this clearly. In 2020 and 2021, we saw the impact of large incentive packages and expanding monetary policies both here and in the price of Bitcoin.
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In 2022, there was a contraction in the global money supply, and the return of M2 growth to negative, as you can see in the graph, led Bitcoin to decline. Of course, in those days, the fall had different stories day by day. Interest hikes start at the beginning of 2022, followed by Luna The collapse of the largest crypto companies such as 3ac depending on the collapse of Luna, the bankruptcy and defrauding the market. Behind Ftx When we say the collapse, we all remember those nightmare -filled days like yesterday.
In 2023 and 2024, the money supply began to expand again and we saw that the price of Bitcoin rapidly rises based on numerous stories. When we arrived in 2025, M2 growth did something like a peak and a slight decrease, and faster losses were seen in the price of Bitcoin.
Orange regions mean shrinkage in money supply and compression of liquidity. Green is the opposite.
Crypto coins will rise
Liquidity only USA Crypto currency investors can relax a little. As a matter of fact, the European Central Bank and the Central Banks of China are loosening. Some voices from the Fed emphasizes that there is a need for preparation, albeit slowly, albeit slowly, even if the strict monetary policy should be reversed.
ECB, inflation Despite the improvement in its appearance, it will continue to expand, although it seems cautious because of the high uncertainties and the continuation of risks. China, on the other hand, is pumping more liquidity to the market to eliminate the problems in the economy. The decline of M2 caused a delayed retreat in the crypto.
In the graph, you can clearly see the delayed drop. However, there is a significant difference between the supply in the days he saw the existing levels before and the present supply. The problem here is the increase in interest to bonds and less risky assets due to the trade war. trade war Since it is not sustainable, after April 2, the stones of this earthquake should stop in place.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
