- Bitcoin thrives as global M2 money supply expands, showing an 82% correlation and outpacing equities like the S&P 500.
- March 25 marked Bitcoin’s breakout, diverging from stocks as investors sought it as a hedge against inflation and monetary debasement.
- Liquidity growth fuels Bitcoin’s rally, reinforcing its role as a store of value while equities struggle with volatility.
The increase in the global M2 money supply has caused a reaction in the price of Bitcoin. According to Colin Talks Crypto, it is impossible to overlook M2’s steady rise. The impact of liquidity expansion on risk assets is substantial, as evidenced by its 82% connection with Bitcoin. As a result of the increased liquidity in financial markets, Bitcoin seems to be riding this enormous wave. Unlike traditional equities, this trend indicates a rising bullish momentum for Bitcoin.
Bitcoin and M2 Correlation Strengthens
Bitcoin has closely followed the expansion in M2, following the expansion of worldwide liquidity. The correlation means Bitcoin benefits directly from monetary expansion. The S&P 500 followed Bitcoin in the early stages but started declining in early 2025. Bitcoin, however, remained on the rise, later diverging away from equities.
Moreover, the Global M2 Money Supply has shown no signs of slowing down. This continuous expansion suggests further capital inflows into Bitcoin. Consequently, Bitcoin’s resilience against traditional market volatility becomes more apparent. Hence, the market sees Bitcoin as a hedge against inflation and monetary debasement.
The March 25 Breakout and Bitcoin’s Decoupling
The data highlights March 25 as the “Blast-Off Date.” Bitcoin went sharply up during this period, breaking away from the S&P 500. The S&P 500 fell sharply in February and continued to remain volatile. But Bitcoin stood firm, increasing consistently as liquidity grew.
Additionally, financial markets have responded differently to monetary expansion. Bitcoin exhibited rising velocity while stocks responded in an unstable manner. This implies that Bitcoin is becoming a more popular safe-haven asset among investors. Furthermore, Bitcoin’s price movement was probably expedited by the additional liquidity brought forth by M2 expansion.
The data suggest further upward movement, given the strong correlation between M2 and Bitcoin. Bitcoin’s performance is contrasted with that of conventional assets. Bitcoin does well when liquidity expands, but the S&P 500 is erratic. As a result, this difference strengthens Bitcoin’s standing as a value store. Furthermore, Bitcoin will be able to maintain its surge given the recent M2 growth.
