Global Money Supply Surge Signals a Potential Bitcoin Boom: Analyst

The growing M2 global money supply is stirring optimism in the crypto market, with many analysts predicting it could set the stage for a strong Bitcoin rally. However, some experts urge caution, warning that the signal alone isn’t enough to justify an all-in approach. 

Notably, on February 25, Bitcoin briefly dropped below $90,000 for the first time since November 2024.

“This isn’t a market to bet your whole stash on a quick correction,” said Pav Hundal, lead analyst at Australian crypto exchange Swyftx. “But our central scenario is still for a strong March and beyond.”

Historical trends suggest that when global liquidity increases, Bitcoin tends to benefit. Economist Lyn Alden noted in a September report that Bitcoin moves in the direction of global M2 supply 83% of the time. With the U.S. recently raising its debt ceiling by $4 trillion and liquidity flowing into the markets, Bitcoin could be poised for significant gains.

Increased Money Supply to Fuel Bitcoin Rally?

Despite recent market turbulence, Hundal remains cautiously optimistic. “It’s not all doom and gloom,” he stated, pointing to MacroMicro data showing that the year-on-year fixed exchange rate for M2 supply across major central banks stood at 3.65% in January.

Many crypto analysts are echoing this sentiment. On Feb. 25, the pseudonymous analyst bitcoindata21 noted on X, “With weakness in the dollar causing a net positive effect on Global M2, just a matter of time hopefully before Bitcoin realizes.”

Another analyst, Colin Talks Crypto, suggested that the expansion in global M2 could be signaling an imminent breakout for Bitcoin. Investment research firm Bravo Research also chimed in, explaining that the U.S. money supply had doubled over the past decade, creating the conditions for Bitcoin’s “parabolic run-up.”

Market at a Crossroads

The recent market slump comes in response to the U.S. President Donald Trump’s reaffirmation on plans for a 25% tariff on Canadian and Mexican goods. This unexpected announcement rattled markets, overshadowing the broader bullish narrative tied to M2 expansion.

While the growing money supply suggests a strong macro environment for Bitcoin, investors remain divided. Some see it as a clear buy signal, while others caution against making major bets amid ongoing economic and geopolitical uncertainties.