One of the matrix which shows the mighty rally of the BTC this cycle.
Understanding Bitcoin’s Price and Liquidity Trends:
Bitcoin’s price movements are often misunderstood, with many attributing its growth solely to halving cycles. However, a deeper look into macroeconomic factors like the M2 money supply growth provides a clearer picture.
What’s the Connection Between M2 Money Supply and Bitcoin?
The M2 money supply represents the amount of cash, checking deposits, and easily accessible savings in an economy. Historically, Bitcoin’s price has shown a strong correlation with the growth of this metric. When central banks inject liquidity into the market (increasing M2), Bitcoin often rallies as excess liquidity flows into risk-on assets like cryptocurrencies.