Have you ever heard of M2❓It's a measure of the money supply that tracks all liquid money in circulation (like what's in your wallet or checking account) PLUS "near money" like savings accounts, money market funds, and short-term deposits. It essentially reflects how much accessible money exists in the economy.
Here's where it gets fascinating:
Bitcoin seems to track global M2 with a noticeable lag of ~70 days - why Since bitcoin is not just digital gold - it is a defense against central bank policies. As M2 expands (read: central banks print more money), bitcoin often rises along with it. But when liquidity shrinks, bitcoin tends to fall when capital shrinks.
🔎 The two upcoming scenarios
According to this trend with bitcoin can:
👍 ... get rid of M2 tracking if BTC-specific demand (think about it: institutional bay-ins or retail-FOMO players) spurs a rally.
2️⃣ Follow M2 in a "mid-cycle correction," reflecting global liquidity trends.
This correlation reinforces bitcoin's role as a macroeconomic barometer. The "70-day lag" is a signal: bitcoin doesn't just react immediately to financial movements - it absorbs them over time, reflecting deeper changes in global liquidity. As M2 declines, expect bitcoin's resilience to be tested. But if the BTC community builds sufficient buying pressure (spot ETFs, anyone?), Bitcoin could make its way independent of traditional markets.
🤔 Not a recommendation for bitcoin. Just something interesting.