Global M2 expansion marches ahead of BTC rally, will liquidity boost crypto again?

The pace of global M2 expansion surpasses even the recently bullish BTC trend. The global broad money supply marched ahead since January, not waiting for crypto to catch up. 

The global M2 money supply accelerated its expansion since January. In the year to date, global liquidity marched ahead, far surpassing even the strong crypto bull market. Global M2 money supply surpassed $114T, while US broad money is at an all-time peak of $22.19T at the end of August. 

In past bull cycles, the M2 expansion was one of the factors behind BTC bull rallies, especially after BTC gained more mainstream interest. This M2 expansion cycle coincides with the growing influence of ETFs, which tap a wider group of investors. The M2 expansion is also matched by the printing of stablecoins, which are the on-chain source of liquidity for crypto, and work as an on-chain version of central bank printing.

Since 2021, M2 is having more cautious expansion cycles, following the 2020 post-pandemic liquidity injection. In the past months for the year to date, the pace of M2 broad money worldwide expanded at a pace similar to 2020. At the start of 2025, M2 broke its all-time highs for the first time since 2021, following a retraction period. 

The trend is driven by the Bank of China, which expanded its M2 by 10% in the past year. Other central banks have followed a similar trend for the past 12 months. 

BTC lags M2 money supply

The current bull cycle raises the expectation that BTC will keep following the M2 chart, as it has done in the past. Usually, BTC growth lags by up to six months. 

This time around, the rapid expansion of M2 left BTC still trying to catch up, as its all-time peaks proved lower than the prediction. With this range of M2 available, BTC predictions range from new highs at $160K and as high as $250K. 

As of September 24, BTC took a step back to $112,463, standing around 10% below its all-time peak. The available global liquidity also shifts to other assets, as stock indexes and gold are also at peak valuations. For now, crypto has still acted as a high-risk tech stock, though treasury companies still hold up the idea of sound money.

Gold closed the gap with M2

During the current expansion, gold more readily closed the gap with M2 growth. As Cryptopolitan reported, gold reached a new all-time high at $3,830. Gold even surpassed the pace of growth of M2, with its latest vertical rally. 

Historically, the precious metal has tracked M2 expansion, essentially fulfilling the role of an unofficial gold standard. BTC has so far performed a similar role, showing its potential as a digital gold standard, the narrative of BTC maximalists. 

Overall, M2 has a slow expansion trend over time, and does not guarantee bull markets. However, rapid M2 growth has been a trigger for crypto repricing and growth for other assets. During the current bull cycle, demand for safe-haven investments increased, while some of the extra liquidity went into riskier assets, as a way to offset inflation.