How much will Bitcoin drop? The Global Money Supply Correlation

Historically, the expansion of the M2 money supply has been linked to Bitcoin bull runs. When M2 increases, it often signals inflationary pressures, which can lead investors to seek assets like Bitcoin as a hedge against inflation.

However, Consorti cautioned about the possibility of a correction, stating, “I don’t want to alarm anyone, but if it continues, Bitcoin could be in for a 20-25% correction.”

Market analyst David Quintieri dismissed the idea of tracking Bitcoin’s movements against global M2, citing the cryptocurrency’s volatility. “All of these are just distractions,” he wrote. “You could do it with the stock market, and it’s more realistic.”

Glassnode lead analyst James Check suggested that the decline in global M2 might be influenced by a stronger U.S. dollar, which effectively reduces the value of M2 in the rest of the world. Meanwhile, crypto commentator Sam KB noted a discrepancy in the current cycle, observing that Bitcoin’s rally persists despite M2 nearing its lowest point.

Hedge fund manager Scott Bessent emphasised this potential dynamic in an interview earlier this month, explaining, “Tariffs cause a stronger dollar.” A stronger dollar often creates headwinds for Bitcoin by reducing its appeal as a hedge.

​While the debate over Bitcoin’s correlation with M2 continues, its next move may hinge on broader macroeconomic trends and the interplay between global liquidity and investor sentiment.