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Bitcoin's Price Surges 70% Following 2% Global M2 Uptick

Coin WorldWednesday, Apr 23, 2025 10:51 am ET
2min read

Bitcoin's price movements have been observed to follow global M2 money supply trends with a 90-day lag, according to recent discussions among analysts. This relationship suggests that Bitcoin tends to rise approximately three months after an increase in the global money supply. The recent increase in the global M2 supply has led some to predict a significant rise in Bitcoin's price.

Ask Aime: "What impact will the recent increase in global M2 money supply have on Bitcoin's price over the next 90 days?"

However, the timing and scale of this relationship are not as straightforward as they might seem. While liquidity trends generally precede Bitcoin's directional movements, other factors such as ETF inflows, macro policy surprises, and halving narratives can modulate or obscure this signal. Since the 2021 bull run, the 180-day rolling pearson correlation between Bitcoin and a forward-shifted global M2 index has oscillated between +0.95 and –0.90, indicating structural periodicity rather than a persistent linkage.

Despite these fluctuations, the period from January 2024 through April 2025 has maintained a more positive long-term correlation of roughly 0.65. However, this correlation is gradually weakening. If past cyclical trends hold, Bitcoin may become decoupled from global M2 for several months. Bitcoin's price behavior, though still broadly liquidity-driven, has decoupled at key moments. For instance, Q1 2024 saw BTC rise vertically during spot-ETF approvals and Halving excitement, despite only muted movements in global M2. These divergences manifested in a negative 30-day correlation, before short-term alignment returned by April 2025, with the metric now sitting at 0.67.

This whipsaw effect is most evident in the 30-day rolling correlation series, which flipped between -1 and +1 multiple times over 2024–25. Such volatility reinforces that Bitcoin’s short-term price action is heavily shaped by idiosyncratic crypto-native flows, including leverage washouts and ETF rebalancing. These bursts introduce noise into the signal that a macro-only model cannot isolate. The 180-day measure, meanwhile, reveals slower mean-reverting cycles that tend to unfold over 10 to 12 months. This reflects broader policy regimes, including periods of quantitative easing, liquidity tightening, or hybrid scenarios such as stealth injections through liquidity facilities.

Directionally, Bitcoin remains responsive to monetary base shifts, but the window for this response appears flexible. The most recent liquidity inflection since Sept. 2024, a roughly 2% uptick in global M2, coincided with a nearly 70% surge in the BTC spot price, which is now trading at approximately $93,800. This disproportionate price response points to amplified sensitivity or additional catalysts beyond traditional liquidity models. ETF flows and stablecoin credit expansion represent parallel liquidity streams that do not register within standard M2 constructs. When large-scale net creations occur within Bitcoin ETFs, as observed in early 2024, they generate directional buying without being visible in macro monetary aggregates. The result is an increasingly elastic relationship in which global M2 serves more as a background rhythm than a predictive engine.

The slope of M2 momentum may offer more utility than absolute levels. A decelerating M2 means the tailwind is weakening even if the correlation remains positive. This perspective reflects market pragmatism, emphasizing relative changes in liquidity velocity over static cross-sectional values. Three macro variables may complicate correlation readings over Q2 2025. First, U.S. debt ceiling volatility and shifts in the Treasury General Account could mechanically alter dollar liquidity. Second, the FOMC’s mid-year guidance on rate cuts could reinforce or disrupt existing trajectories. Third, legislative moves around tariffs may constrain US liquidity, impacting the broader crypto credit cycle.

Regional dispersion further limits the clarity of the M2 signal. With the US, China, and Japan constituting the bulk of the M2 index, divergent policy tracks among these economies dilute the global average. A central bank deviating from collective easing or tightening skews the composite figure, introducing noise that may mislead macro-model adherents. Lastly, revisions to M2 figures remain nontrivial. With reporting lags and restatements common, correlations calculated in real time may be altered retroactively, complicating backward inference and strategy calibration.

While the core thesis that “liquidity drives Bitcoin” remains directionally valid, the elasticity of this relationship illustrates the limitations of applying macro models in isolation. ETF market structure, halving cycles, regulatory policy, discretionary trading flows, and other macro indicators inject enough complexity to disrupt otherwise clean macro overlays. Traders interpreting Bitcoin-M2 correlations as leading signals must contend with a landscape where structural breaks, regime shifts, and alternative liquidity conduits continually reshape the inputs. Liquidity is oxygen for risk assets, but there’s now more than one oxygen tank for Bitcoin.

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Pushover112233
04/23
Stablecoin credit expansion is the wild west of finance. Who's really tracking that?
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AP9384629344432
04/23
Bitcoin's price surge post-M2 uptick isn't a straightforward dance. Other factors like ETF flows and halving narratives spice up the moves.
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Liteboyy
04/23
M2 momentum slope might be more useful than absolute levels. It's all about relative changes in liquidity velocity.
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neilupinto
04/23
@Liteboyy True, M2 slope > levels. Markets r about velocity, not static values.
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PlatHobbits7
04/23
M2 momentum might be more useful than levels. Think trends, not static values, for better strategies.
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Agreeable_Zebra_4080
04/23
@PlatHobbits7 True, trends r us.
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VirtualLife76
04/23
Liquidity's like oxygen for Bitcoin, but there are multiple tanks now. Think beyond M2 for real gains.
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daarkann
04/23
Watching Bitcoin surge yet wondering if ETF flows are the new secret weapons in town.
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Running4eva
04/23
FOMO is real when Bitcoin spikes, but remember, correlation with M2 isn't always a guarantee. 📈
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Oleksandr_G
04/23
@Running4eva What's your take on ETF inflows?
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nrthrnbr
04/23
@Running4eva True, M2 correlation ain't always reliable.
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Conscious_Shine_5100
04/23
Halving narratives pump Bitcoin sometimes, but it's like trying to catch a lightning bug in a jar.
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Hamlerhead
04/23
Debt ceiling talks might shake crypto more than M2
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Horror_Scientist_930
04/23
@Hamlerhead True, debt talks can be wild.
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kenton143
04/23
I'm holding Bitcoin long-term, but keeping an eye on ETF movements and halving cycles for tweaks.
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LackAffectionate725
04/23
@kenton143 How long you been holding BTC? Any specific target in mind?
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owter12
04/23
M2-Bitcoin link getting weak; other factors take over
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skarupp
04/23
Global M2 got noise from regional policies. It's like trying to time $AAPL with the whole world's opinions.
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Wanderer_369
04/23
M2-Bitcoin link is like a crypto horoscope—sometimes accurate, often a laugh. 🚀🤔
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DanielBeuthner
04/23
Correlation isn't causation. Don't bet the farm on M2 predictions. Diversify your intel, folks.
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pregizex
04/23
Halving excitement pumped BTC; M2 lagged this time
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JuniorCharge4571
04/23
@pregizex Halving's a pump, M2 chases.
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