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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Barhydt stated, “I’ve viewed numerous posts presenting diverse renditions of the global liquidity M2 vs Bitcoin price chart – I’ve shared a few here. Kudos to @RaoulGMI and @BittelJulien for identifying this pattern.”

Most of these charts anticipate a slight decline in the next few days, followed by a surge to a record high of $130,000 by August or September. Barhydt, however, emphasized that these predictions could be entirely off the mark.

Barhydt opined that the global liquidity needs to increase significantly in the coming months. As the fiat supply grows, Bitcoin absorbs the surplus, leading to gains that will likely spill over to other L1 platforms and subsequently to speculative altcoins – the so-called ‘alt season’.

Despite this, he warned traders against complacency, suggesting that they should be prepared for a potential short-term downtrend to $95,000 before any substantial rally takes place.

When confronted with the concern that the model might be saturated, Barhydt dismissed the notion, stating, “Even though thousands might be examining this, the majority of retail investors aren’t focusing on crypto currently.”

Another critique suggested that the liquidity data is not collected frequently enough to predict daily movements. Barhydt agreed, but asserted that it serves as a solid tool for predicting macro trends on a weekly scale.

With the global M2 nearing a record $111 trillion, experts like Pal and Bittel believe Bitcoin is set to climb further. Whether Bitcoin will reach Barhydt’s $130,000 target or not will depend on the pace at which central banks increase their balance sheets and how traders leverage in the coming weeks.

As of now, Bitcoin is trading at $104,625.

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