🤔If at any point you stopped and asked: "After all, why did the $BTC rise so much?" One reason could be the increase in M2 Supply. This indicator shows how much money is in the world’s pockets — simply put, it measures the amount of money in circulation in the economy.
It considers practically all FIATs, and includes:
-Physical money (notes and coins)
-Checking account deposit
-Savings account and other high liquidity assets
💰In other words, the higher the M2, the more money there is for consumption, investment, and even speculation.
As the trend of central banks is to expand their monetary base — for example, more dollars being created, its value tends to decrease, meaning the currency ultimately suffers inflation. Like the dollar, which has already lost more than 90% of its purchasing power since its creation.
In this scenario, Bitcoin is a scarce alternative. Thus, when M2 surges, BTC tends to appreciate, serving as a hedge against the loss of value of traditional money.
📊 See the chart below:
The white line represents the price of Bitcoin.
The red line shows the M2 Supply.
The colored area below represents the annual growth or contraction rate of M2.
Notice how the peaks of M2 expansion coincide with Bitcoin's highs — especially in 2020 and 2021, when monetary stimulus reached historic levels.
🧠Conclusion
More M2 = more money in the system = greater potential for appreciation for scarce assets like Bitcoin.
It’s not always an immediate relationship, but the chart shows how Bitcoin responds to this macro scenario and its relationship with the indicator.
👇🏻Knowing this, does the price of $BTC really rise on its own merit... or just because governments can't stop printing money?
