Wild price action in the crypto markets always sparks debate, but few drivers generate as much curiosity as the link between Bitcoin’s trajectory and the world’s money supply. Now, top macro analysts spotlight a powerful correlation for 2025: Bitcoin’s price movement is tracking closely with the global and US M2 money supply—and this could unlock outsized upside for those who recognize the pattern early.

Liquidity Emerges as Bitcoin’s Secret Engine

While market narratives often focus on halving cycles or regulatory headlines, liquidity is the bedrock powering price surges. The US M2 money supply hit a staggering $21.94 trillion in July 2025—reflecting ongoing, aggressive monetary expansion. According to macro researchers like Julien Bittel, this expansion isn’t just history in the making; it’s shaping where capital flows next. Bitcoin, positioned as both store-of-value and risk-on asset, is thriving in this environment, drawing in inflows from both retail and institutional players.

Why Traders Can’t Ignore This Trend

For traders, understanding the interplay between central bank policy, liquidity cycles, and crypto markets is invaluable. Past cycles show that when liquidity flows are strong, Bitcoin tends to outperform—not just against fiat, but against most other digital assets as well. In today’s cycle, robust institutional ETF inflows and a surge in new retail wallets confirm that Bitcoin’s dominance is being reinforced by real, growing demand. Traders who capitalize on liquidity trends can better anticipate price strength—even in volatile environments.

Risk and Opportunity: Navigating the Next Cycle

No cycle is risk-free. If central banks reverse course and tighten liquidity, Bitcoin’s near-term upside could be capped. But as long as global M2 expansion continues, the historical pattern suggests traders may see further rallies. The key for active market participants: track liquidity indicators, monitor ETF flows, and watch for wallet activity to anticipate demand. It’s not about timing tops and bottoms—it’s about positioning where liquidity leads.

Actionable Insight: Track Money, Not Just Markets

When macro trends and onchain data align, traders find their edge. Use analytics platforms to monitor global M2 movements and follow wallet growth and ETF activity. This data-driven approach transforms guesswork into strategy—helping you capture moves others miss.

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