This chart illustrates the global money supply (M2) from the top 21 central banks, compared to the price of Bitcoin.
The M2 Global measure includes cash, checking and savings deposits, money market accounts, and smaller deposits under $100,000.
An increase in global liquidity indicates that major central banks are making more money available to their economies. They typically achieve this by lowering interest rates or purchasing government bonds and other securities to expand the money supply.
When comparing Bitcoin’s price to the M2 growth rates of central banks like the FED, ECB, PBoC, BoJ, and others, there is a clear correlation—Bitcoin tends to rise in tandem with the growth of the M2 supply.
Historically, Bitcoin bull markets have aligned with periods of increased global liquidity.
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