The M2 money supply of America has reached a record high, Bitcoin may benefit.

The M2 money supply of America continued to expand in August, reaching a new record high. This index also correlates with the growth of Bitcoin as it is often viewed as an alternative to depreciating currencies.

The M2 money supply of America reached a new peak at the end of August, with 22.13 trillion dollars reported as of August 26. The next reporting period is expected to be announced after a month. Since the end of July, the M2 index has increased from 22.02 trillion dollars, with a slow expansion trend.

M2 Supply | Source: Trading EconomicsSince August 2024, the M2 index has continuously increased, adding an additional 1 trillion dollars. At the same time, the price of BTC closely followed the expansion of liquidity, reaching a record high of over 124,000 dollars. The bullish market in July also occurred based on another monthly increase in M2.

With the expansion momentum in the next month, BTC may fluctuate around a close correlation with M2. Typically, BTC has a delay of up to 90 days when tracking the M2 chart. During correction phases, BTC lags behind M2 but will then catch up with the trend. The cryptocurrency frenzy of 2021 also coincided with one of the fastest M2 expansions in the past 5 years.

Global money supply also boosts Bitcoin

Global money supply also expands positively in 2025, with liquidity increasing in China and 19 other central banks. Since January, global M2 has increased by an additional 7 trillion dollars, reaching a total of 112 trillion dollars.

The rise of BTC over the past three months closely follows the strong growth phase of global M2, once again demonstrating that the BTC model runs in line with the trend of additional liquidity flow.

Bitcoin also rises in correlation with the influx of capital into stablecoins, but these flows also reflect the overall market sentiment and the liquidity trend seeking new forms of investment.

However, the correlation with M2 mainly exists during bullish phases. The relatively high M2 supply in 2022 and 2023 did not prevent the prolonged bearish market, due to internal market events in the crypto space.

Bitcoin follows the expansion of global assets

The correlation of BTC with low interest rates and increasing liquidity also means that this asset closely follows both gold and the S&P 500 index.

In the most recent expansion, all three asset types maintained a common trend. Currently, BTC has not outperformed other asset types, despite some short-term increases surpassing the trend of stocks.

Currently, BTC is standing at 110,288 dollars, reflecting the gap with stocks and the recent addition of global M2 supply as well as America. History shows that the gap between the value of BTC and this increase in M2 often creates expectations for a new surge in the coming months.

The M2 index is monitored to identify potential peaks in the BTC cycle. Currently, BTC is still close to its all-time high, but there are expectations for a bullish trend towards the end of the year and the establishment of new price levels. On the other hand, BTC still faces pressure from within the crypto market and may not closely follow the M2 index during high volatility periods. Nevertheless, M2 is still monitored to assess the overall trend and long-term impact on all markets.

Minh Anh