Market analysts are closely monitoring the expansion of global money supply as a potential influence on cryptocurrency performance. Many believe that central bank-driven liquidity increases ultimately flow into riskier assets, including Bitcoin.

Crypto analyst Lark Davis recently observed that Bitcoin tends to follow the 100-day trend of M2 money supply. He predicted a potential “parabolic move” that could drive the price of BTC to $250,000 in the coming months. Currently, however, Bitcoin appears to be trailing behind M2 growth — a trend seen over longer timeframes.

According to Global Markets Investor, U.S. M2 money supply rose by 4.5% year-over-year in May 2025, reaching a record $21.94 trillion. Projections indicate that the figure may have exceeded $22 trillion in July, driven by ongoing monetary expansion. Since March 2020, when the pandemic triggered large-scale stimulus measures, M2 has increased by approximately 37%.

Globally, total money supply hit a new record of $93.7 trillion, growing at an annual rate of 7.45%. This figure reflects the combined balance sheets of the U.S. Federal Reserve, the European Central Bank, the Bank of Japan, and the People’s Bank of China.

Analyst Crypto Auris believes that, given current liquidity trends, Bitcoin could potentially reach $170,000 over the medium term.

However, not all experts agree on the strength of the correlation between money supply and Bitcoin performance. On July 7, Protos published a report questioning this link, noting that the correlation breaks down when timeframes are adjusted.

For example, between 2021 and the present, M2 and BTC appear closely aligned. But stretching the timeline back to 2019 shows that M2 growth led Bitcoin by about two years. Furthermore, while M2 reached record levels in November 2022, Bitcoin was in decline following the collapse of crypto exchange FTX.

Protos argues that aggregate money supply does not directly represent liquidity available for crypto investments and is more indicative of broader price-level inflation.

Additionally, macroeconomic uncertainty contributed to volatility. The U.S. President issued formal communications to several Asian countries — including Japan, South Korea, Thailand, and Indonesia — that have yet to sign new trade agreements. These developments negatively impacted crypto markets.

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