I noticed an interesting chart on the US money supply M2 — Federal Reserve data shows quite a fascinating story over the past few years.

In July 2025, M2 reached a new high of $22.02 trillion. For context: four years ago, in mid-2021, it was only $17.25 trillion. The sharpest jump occurred around mid-2022 — at that point, the US M2 money supply soared to $21.75 trillion. Then there was a period of stabilization in 2023-2024, when the figure hovered between $20 trillion and $20.5 trillion. But since mid-2024, the trend has turned upward, and we see a monthly increase of about $137 billion, or +0.63%.

What does this mean? The growing US M2 money supply indicates a significant increase in liquidity within the American economy. Historically, such trends are associated with inflationary pressure: more money starts competing for the same amount of goods and services. It appears the Fed is pursuing an expansionary policy, possibly in response to various economic stimuli.

For the crypto market, this could be quite significant. First, Bitcoin and other assets are often viewed as hedges against inflation. When the US M2 money supply grows at such a pace, investors begin seeking ways to protect their capital from currency devaluation — and crypto becomes one of the options.

Second, excess liquidity usually leads to capital flows into risky assets, including cryptocurrencies. This can support prices in the short term. But there’s another side: if inflation spirals out of control, central banks may tighten policies, raise interest rates — and volatility could increase.

Institutional investors will also start reallocating portfolios. The crypto market might show higher correlation with traditional financial markets as everyone reacts to the same macroeconomic signals.

The long-term question remains open. If the US M2 continues to grow, it could eventually lead to higher interest rates or reduced liquidity. This might be unpleasant for risk assets, especially if risk appetite declines.

Overall: the record level of M2 could give the crypto market a short-term boost due to inflation fears. But the long-term trend will depend on how the Fed acts moving forward and how the global economic situation develops. It’s important to keep a close eye on these data.