Bitcoin Surges 8% to $104,000 as M2 Liquidity Correlation Resurfaces

Bitcoin's price surged above $100,000 this week, reaching a peak of $104,000 on May 8. This surge coincided with the resurgence of a chart tracking the global M2 money supply, lagged by 90 days, on social media. The correlation between Bitcoin’s price movement and the M2 liquidity curve has gained renewed attention, prompting a closer examination of the market dynamics at play.

Julien Bittel, Head of Macro Research at Global Macro Investor, noted that the M2 vs Bitcoin chart continues to indicate an upward trend, suggesting that Bitcoin prices are likely to rise further. However, analysts caution that while the correlation is real in some aspects, it is elastic and more closely aligned with global liquidity cycles rather than being a definitive predictor.

The chart in question overlays Bitcoin's price with the Global M2 Liquidity Index, which has been shifted by three months. The M2 measure of global money supply growth began a fresh ascent in February, and this rise is now being reflected in market movements, with Bitcoin’s price trajectory closely following the lagged M2 curve.

Over the past 10 weeks, Bitcoin has recovered from a consolidation phase below $80,000 to reclaim six figures, driven partly by consistent inflows into digital asset funds. In the past three weeks, billions have flowed into crypto investment products, with $1.8 billion directed to Bitcoin ETFs. On May 7, a single-day net inflow of $422 million was led by BlackRock’s IBIT, the largest spot Bitcoin ETF with approximately $58 billion in assets under management.

The rolling correlation between Bitcoin and lagged M2 measures offers a more complex picture. The 180-day Pearson correlation between the two has averaged 0.65 since early 2024, though 30-day readings show volatility, oscillating between -0.9 and +0.95. This variability cautions against reading too deeply into short-term overlaps.

Still, the timing of the latest chart convergence has sparked renewed interest in macro-led crypto valuation frameworks. The Global M2 Liquidity Index, constructed from a weighted average of central bank money supply indicators, is a proxy for available dollar liquidity in the financial system. When adjusted for a 90-day lag, it has sometimes foreshadowed turning points in Bitcoin’s price over multi-month windows. The idea gained prominence during the 2021 bull cycle and has since re-emerged as an interpretive lens, especially as BTC decouples from tech equities.

Beyond ETF flows and liquidity overlays, the broader macro environment adds weight to the thesis. The U.S. dollar index has slipped nearly 4% since late February, and trade-driven capital rotation has contributed to demand for decentralized alternatives. Though M2 metrics do not account for stablecoin issuance or off-balance-sheet credit, they remain a reference point for modeling system-wide liquidity pressures.

Bitcoin’s current position near $103,000 coincides with a broader wave of risk-on positioning across digital assets, but whether the M2 model retains influence over forward price discovery depends on liquidity persistence. Should central bank data continue to reflect a climbing M2 curve, attention may shift to how much of that liquidity finds its way into crypto via institutional channels.

While the 90-day lag chart remains a visually compelling narrative tool, its utility as a trading signal is bounded by noise and external catalysts. As the price climbs, the model may serve more as a sentiment anchor than a deterministic forecast. For now, Bitcoin sits above $100,000 for the second time in 2025, reasserting its capacity to track and reflect global liquidity cycles, even as the mechanisms behind that correlation remain fluid.

Interestingly, since the start of 2025, the global M2 money supply has increased by 3.25%. However, the 90-day lagged chart has actually decreased by 0.16% over the same period, and Bitcoin is up around 8%. Thus, were Bitcoin to be following global lagged M2 precisely, it would be down on the year. If you alter the analysis window to the last 12 months, Bitcoin is up 75%, global M2 is up 3.8%, and lagged M2 is up 7.37%, meaning that over this period, Bitcoin has massively outperformed M2.

Therefore, as stated in the previous analysis, Bitcoin’s correlation with the lagged global M2 money supply is an extremely powerful metric, except when it’s not. It is undoubtedly fun to watch, though.