#btc

The alignment of the planets continues. While the United States wants to accumulate 'as much bitcoin as possible', the global money supply is rising again.

The correlation between bitcoin and the global money supply (M2) has been widely discussed lately.

As a reminder, central banks can slow the pace of money creation by raising rates and vice versa. In the long term, the M2 money supply of advanced countries grows by 7% per year.

Put differently, if economic production remains stable, money loses 7% of its value each year. This results in a loss of 50% over ten years…

Increasing the production of goods and services helps absorb the creation of money. But without growth, wages cannot keep up with inflation, and savings lose their purchasing power.

This is the situation we find ourselves in due to the growing difficulties in extracting the energy essential for growth. Not to mention the government waste that doesn’t help at all. And since inflation encourages trading savings for a desirable asset, M2 is a good leading indicator for the price of bitcoin.

This correlation is not perfect, but historically, an increase in the global money supply often leads to an influx of capital into desirable assets such as bitcoin, stocks, and commodities.

The most desirable asset today is bitcoin. For many reasons perfectly articulated by Michael Saylor at the Digital Asset Summit in New York this week.

In short, the numbers show that bitcoin tends to follow the evolution of the money supply with a lag of about 70 days. The M2 guy expects bitcoin to resume its upward march on March 25. Time will tell.