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What is M2 money supply and how does it affect the price of bitcoin ? 🤔

M2 money supply is a key measure of the amount of money circulating in an economy. It includes cash, checking accounts, savings accounts, money market accounts. 

How Does M2 Affect Bitcoin?

1. More M2 = More Money to Spend or Invest

When the government or central bank increases the M2 money supply (like printing money or lowering interest rates), people and businesses have more cash.
With extra cash, some people look for investments, and one of those is Bitcoin.

If M2 grows too fast, it can cause inflation meaning the prices of things go up because there's more money chasing the same amount of stuff.
Some people buy Bitcoin to protect their money from inflation, since Bitcoin has a fixed supply and can’t be inflated like dollars.

More people with more money investing in Bitcoin = higher demand.
Higher demand and fixed supply = Bitcoin price goes up.

Hodler exploring web3. Solana airdrop farmer, bitcoin solo miner, Helium network miner, and Medium blogger. Sense channel mod.

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