Summary of the Record High U.S. M2 Money Supply and Its Impact on the Cryptocurrency Market

I. Core Data

By the end of May 2025, the U.S. M2 money supply reached $21.94 trillion, setting a new historical high (surpassing the peak of $21.72 trillion in March 2022), with a year-on-year growth rate of 4.5%, the highest level in nearly three years.

II. Contradictory Effects on Cryptocurrencies

(A) Positive Logic

M2 growth is typically seen as a signal of a loose financial environment, which may encourage investors to increase their allocation to risk assets like Bitcoin, boosting demand for cryptocurrencies.

(B) Risk Logic

If the growth rate of money supply exceeds economic growth, it may trigger inflationary pressures, forcing the Federal Reserve to raise interest rates, thereby suppressing market willingness to invest in risk assets. Historical experience shows that after M2 surged in 2020, PCE inflation began to rise in 2021 and fell back in 2023 as the growth rate of M2 declined. If the current M2 continues to grow, it may raise inflation in the future, making it difficult for the Federal Reserve to lower interest rates (such as the 1% target called for by Trump), which in turn affects the liquidity in the cryptocurrency market.

III. Market Reaction

Bitcoin (BTC) price short-term increase +2.6%, the unspecified asset's ST increase +0.61%, indicating that the market's reaction to the M2 data is still in a digestion phase, and future trends need to be further observed in conjunction with inflation and monetary policy trends. $BTC $ETH $SOL #美股代币化 #特朗普马斯克分歧 #Strategy增持比特币