The M2 money supply is a broad indicator of liquidity, accounting for US dollar-adjusted liquidity from major economies such as the United States, the eurozone, Japan, the UK, and Canada. An increase in M2 signifies increased circulation of money in the economy, inclusive of bank accounts, checking deposits, and other liquid assets. This surge in liquidity can lead to an influx of capital into riskier assets, such as cryptocurrencies.

Historically, Bitcoin’s price trajectory has shown a lagged response to global and US M2 supply changes, typically within a 3–6 month window, particularly during liquidity shifts. In certain instances, like the April 2025 surge above $100,000, the delay was as short as 1–2 weeks.

According to Crypto Auris, a noted analyst, as the global money supply expands, Bitcoin’s next milestone is poised at ~$170K. Analysts across the board predict the BTC price to fall within the $150,000-200,000 range by the end of 2025, largely driven by increased institutional investments through ETFs and corporations.

The upsurge in Bitcoin demand is juxtaposed with a declining US dollar. The US Dollar Index (DXY) has dipped by 10.8% in the first half of 2025, marking its worst performance since 1973. Meanwhile, Bitcoin has appreciated by 13.25% during the same period, signifying an inverse correlation with the dollar. Prolonged dollar weakness could potentially fuel a Bitcoin rally beyond its typical cycle behaviour.

This article is intended for informational purposes only and does not constitute investment advice or recommendations. It is imperative for readers to conduct their own thorough research before making any investment or trading decisions.

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