#SXTLaunchpool The global M2 money supply has recently surged to approximately $111 trillion, marking a significant increase in global liquidity. Historically, such expansions in M2 have correlated with bullish trends in Bitcoin's price, as increased liquidity often drives investment into risk assets like cryptocurrencies.
Notably, Bitcoin has recently surpassed the $100,000 mark, reaching a peak of $104,000 on May 8. Analysts have observed that Bitcoin's price movements often lag behind changes in the M2 money supply by about 90 days, suggesting that the current liquidity surge could continue to influence Bitcoin's trajectory in the coming months .
However, it's essential to approach this correlation with caution. The relationship between M2 and Bitcoin is not always consistent. For instance, discrepancies in data reporting, such as a recent anomaly in India's M2 figures, can distort the perceived correlation . Additionally, other factors like ETF inflows and macroeconomic policies also play significant roles in Bitcoin's price movements .
Binance co-founder Changpeng Zhao has expressed optimism about Bitcoin's future, predicting that it could reach between $500,000 and $1 million in this bull cycle . While such projections are speculative, they underscore the growing interest in Bitcoin as a potential hedge against inflation and monetary expansion.
For investors considering Bitcoin as a safeguard against global monetary expansion, it's crucial to stay informed about macroeconomic indicators and to be aware of the inherent volatility in the cryptocurrency market. Diversifying investments and consulting with financial advisors can also help in making informed decisions.