With global M2 money supply climbing to an all-time high of $95 trillion to $96 trillion, bitcoin—trading between $117,800 and $118,102 in the past 24 hours—looks set to capture serious upside in 2025 as liquidity floods into assets.
M2 Money Boom: Why Bitcoin Prices May Soar Amid Liquidity Flood
Plenty of crypto fans are banking on the idea that a ballooning M2 will give the digital currency space a major lift. This notion has been regularly making the rounds on platforms like Reddit and X, where users are spinning up threads and sharing posts dissecting exactly how this might unfold.
A post on r/cryptocurrency linking bitcoin to global M2 is making the rounds—one of many flooding Reddit and X lately.
Essentially, M2 represents a broad measure of money supply in an economy, encompassing physical currency in circulation, demand deposits in checking accounts, savings deposits, money market funds and other highly liquid near-money assets.
Unlike narrower measures like M1, which focuses on cash and checking deposits, M2 captures funds readily available for spending or investment, providing insight into economic liquidity and potential inflationary pressures. In other words, M2 offers a clear window into global liquidity.
Globally, M2 aggregates these figures from major economies, converted to U.S. dollars, with recent data showing the world’s four largest central banks—the U.S. Federal Reserve, European Central Bank, Bank of Japan, and People’s Bank of China—driving the total to new highs.
This measure functions as a barometer for monetary policy effectiveness; central banks influence M2 through tools like interest rate adjustments, open market operations and reserve requirements, which expand or contract the money available in the banking system.
Over on r/bitcoin, many are betting that M2 growth will pave the way for sky-high bitcoin prices.
When M2 grows, it signals increased liquidity, enabling more lending, spending and investment, though excessive expansion can lead to inflation as more money chases the same goods and services.
The current rise in global M2 stems from a resurgence in government stimulus and liquidity operations, including quantitative easing programs where central banks purchase assets to inject funds into economies and direct fiscal supports like infrastructure spending or subsidies.
These policies, aimed at stabilizing growth post-recessions or during slowdowns, have accelerated since 2020, with central banks worldwide adding trillions to balance sheets to counter economic disruptions.
China’s monetary expansion plays an outsized role, with its M2 exceeding $44 trillion—more than double the U.S. figure of about $22 trillion—fueled by efforts to bolster domestic growth, support exports, and maintain financial stability amid global trade tensions.
This aggressive growth, averaging over 8% annually in recent years, contributes significantly to the global increase, as China’s policies ripple through international markets via trade and investment channels.
Historical data reveals a strong correlation between M2 expansions and rising asset prices, including stocks, real estate, and cryptocurrencies like bitcoin, as excess liquidity seeks higher returns in riskier investments.
For bitcoin specifically, analyses show correlations averaging 0.65 to 0.89 with global M2 growth, often with M2 leading price movements by 12 to 90 days, as increased money supply erodes fiat purchasing power and drives demand for scarce assets like bitcoin, viewed as a hedge against inflation.
Social media posts linking M2 growth to bitcoin’s rise have been popping up all over X. “Global liquidity is surging,” one X user remarked on Saturday. “M2 supply exploding. Bitcoin’s chart is copying it step by step. Ignore the noise. Follow the liquidity. Because when liquidity floods in, BTC doesn’t wait. Liquidity leads. Price obeys,” the X account added.
In 2020-2021, for instance, global M2 surged over 25% amid pandemic stimulus, coinciding with bitcoin’s rally from under $10,000 to nearly $69,000, illustrating how liquidity boosts speculative flows into fixed-supply assets. With M2 sitting at record levels, some crypto believers are calling for BTC to tap $150,000 on the next flush of liquidity.
With global M2 now at an all-time high and projected to grow 8% to 10% annually through 2025 amid ongoing easing, bitcoin could very well see amplified upside, as liquidity historically multiplies its price sensitivity—potentially adding thousands per trillion in new M2. Meanwhile, the Trump administration is pushing hard for Fed rate cuts, hoping a dose of easing will jolt the economy.
To many bitcoin proponents, this dynamic persists despite short-term volatility, as bitcoin’s capped supply of 21 million coins contrasts with expanding fiat, positioning it to capture a growing share of global liquidity in 2025.