Key Takeaways
- Bitcoin reached $104,000 on May 8, reigniting interest in the 90-day lagged M2 money supply chart.
- Global M2 supply started rising in February, with traders linking this trend to Bitcoin’s recent price action.
- Despite intermittent alignment, Bitcoin outperformed M2 growth by 75% over the past year.
The Resurfaced M2-Bitcoin Correlation
Bitcoin’s rally to $104,000 has brought renewed attention to the 90-day lagged M2 chart, a metric popularized during the 2021 bull market. The chart suggests a historical correlation between global liquidity trends and Bitcoin’s price movements, though its predictive accuracy remains debated.
Expert Perspective
Julien Bittel, Head of Macro Research at Global Macro Investor, noted:
"The chart still tells the same story: We’re going higher."
This sentiment echoes among traders who view M2 trends as a proxy for macroeconomic liquidity supporting crypto valuations.
Analyzing M2 Money Supply Trends
M2 (broad money supply) began climbing globally in February 2025. When adjusted for a 90-day lag, the uptick appears to coincide with Bitcoin’s May price surge. However, analysts emphasize:
- The correlation is non-linear and influenced by broader market dynamics.
- CryptoSlate highlights that M2 reflects macro liquidity rather than precise price targets.
👉 Why global liquidity trends matter for crypto
Bitcoin’s Performance: Beyond M2
While the M2 chart provides context, Bitcoin’s gains diverge significantly:
| Metric | YTD Change (2025) | 12-Month Growth |
|----------------------|-------------------|-----------------|
| Bitcoin Price | +8% | +75% |
| Lagged M2 Supply | -0.16% | +7.37% |
Additional Rally Drivers
- ETF Inflows: Bitcoin ETFs attracted $1.8 billion** over three weeks, with **BlackRock’s IBIT** leading single-day inflows at **$422 million.
- Market Sentiment: Institutional adoption and halving-induced scarcity narratives amplify bullish momentum.
Limitations of the M2 Chart
Despite its appeal, reliance on the M2 correlation carries risks:
- Variable Correlation: Historical alignment fluctuates across market cycles.
- External Factors: Geopolitical events, regulatory shifts, and ETF flows often override macro trends.
👉 How to diversify your crypto strategy
FAQ Section
Q: How reliable is the M2 chart for predicting Bitcoin’s price?
A: It’s a broad indicator of liquidity conditions but not a standalone tool due to evolving market dynamics.
Q: Why has Bitcoin outpaced M2 growth recently?
A: Factors like ETF demand, supply shocks, and institutional interest drive outsized returns.
Q: Should traders prioritize M2 data over on-chain metrics?
A: Combine both—M2 signals macro trends, while on-chain data (e.g., exchange reserves) offers granular insights.
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