Bitcoin Boom Predictions Spark Debate Over Global M2 Data Reliability

Crypto influencers have been making bold predictions about an imminent Bitcoin boom, citing an expected surge in the global money supply as the catalyst. Real Vision co-founder Raoul Pal recently shared an updated chart overlaying Bitcoin against Global M2, a measure of the broad money supply across major economies, and declared that the time for a significant rally is near. Other influencers echoed this sentiment, with some predicting that Bitcoin could reach new all-time highs within weeks.

However, not everyone is convinced by these optimistic projections. TXMC, a prominent figure in the crypto community, criticized the methodology behind these predictions, arguing that the daily or weekly Global M2 data used in these charts is flawed. According to TXMC, the United States updates its M2 data weekly, while other countries do so monthly, making the daily or weekly Global M2 figures unreliable. He also pointed out that the recent surge in Global M2 is largely due to the weakening US dollar, rather than an actual increase in the money supply.

TXMC further argued that the practice of applying random week offsets to align Global M2 with Bitcoin prices is misleading. He claimed that these charts are overfitted to recent data and do not provide a reliable basis for future predictions. TXMC also highlighted that China, which accounts for a significant portion of Global M2, is the only major economy whose broad money supply is above its post-COVID peak in dollar terms, while the US M2 is below its 2022 peak and growing at a slow pace.

In response to TXMC's criticisms, YouTuber Colin Talks Crypto claimed that key central banks do provide higher-frequency M2 data. However, TXMC countered this by stating that any high-frequency series is merely a projection based on older data and real-time foreign exchange rates. He maintained that Global M2 is an abstraction that introduces noise via foreign exchange rates and does not accurately reflect the global money supply.

Despite the debate, Bitcoin's price remains below the downtrend line, indicating that the market is still cautious. The differing opinions among influencers and analysts highlight the complexity of predicting Bitcoin's price movements and the need for a nuanced understanding of the underlying data. As the crypto community continues to monitor these developments, it remains to be seen whether the predicted boom will materialize or if the market will continue to exhibit volatility.