M2 money supply is faster than Bitcoin: A new challenge of inflation? Haden Smith's analysis
Introduction:
In the 'Robinhood Traders Chat!' on social media, Haden Smith, who is an 'All-star contributor', recently made a thought-provoking observation. According to his post, the growth rate of the global M2 money supply is outpacing the increase in Bitcoin's value, raising the question of whether inflation has become so severe that Bitcoin is proving inadequate in comparison.
What is M2 money supply?
First, it is essential to understand what M2 money supply is. In simple terms, M2 is a measure of the total amount of currency in any country, including cash, checking accounts in banks, savings accounts, and other assets that can be easily converted to cash. When the M2 supply increases, it means more money is circulating in the market, which often leads to higher inflation.
Haden Smith's analysis:
In his post, made around 6 hours ago, Haden Smith claimed that "the global M2 money supply is outpacing Bitcoin, meaning that inflation is so bad that Bitcoin..." (the rest of the post is not fully visible in the image). This suggests that Bitcoin, traditionally considered a strong shield against inflation, is not increasing in value as rapidly as governments are printing money or increasing the money supply.
A chart is also attached to his post, showing technical indicators such as 'BOS' (Break of Structure) and 'CHoCH' (Change of Character). The chart also displays buy and sell levels around 103,700. Although it is unclear whether this chart specifically pertains to Bitcoin or another asset, it reflects the analyst's effort to understand market trends.
Implications for investors:
If Haden Smith's analysis is correct, it could have profound implications for investors:
The real challenge of inflation: This may mean that inflationary pressures are much stronger than expected, and traditional assets are also faltering in its wake.
Questioning the status of Bitcoin: Although Bitcoin is considered to be digital gold and an effective hedge against inflation, if the M2 supply is increasing even more rapidly, its utility may come into question, at least in the short-term perspective.
Change in investment strategy: Investors may need to reassess their strategies and consider more diversified and potentially aggressive options to hedge against inflation.
Discussion:
Haden Smith's post could spark a new debate among the crypto community and economic analysts. It will be important to see whether this trend continues and whether Bitcoin can maintain its edge against the M2 money supply in the long run.
Your opinion:
What are your thoughts on this? Do you believe that the massive increase in M2 money supply is negatively affecting Bitcoin's value? Or is this a temporary trend, and will Bitcoin soon stabilize its position? Please share your valuable opinions in the comments below so we can all learn from each other's experiences and knowledge. Your opinion and sharing this article could also help us win a reward in Bitcoin.