The instinct when you see this M2 divergence is to say the correlation broke. It didn't. The M2-to-$BTC relationship has historically carried a lag of 70 to 107 days — so the liquidity expanding right now wasn't ever expected to show up in crypto behavior immediately. That's the optimistic read, and it's not unreasonable.
The harder read is that the capital being unlocked is making an active choice. Gold and silver are outperforming. Equities are absorbing flows. M2 expansion also excludes broader asset pools — real estate, institutional funds, stocks — that compete with crypto for the same liquidity. The pool is larger than it looks, and crypto is losing that competition right now.
What stood out to me is that Kraken and Coinbase have both quietly expanded into stocks and commodities during this same period. When the platforms built on crypto start pivoting toward the assets actually capturing current flows, that's a candid structural admission worth noting. The framework isn't wrong. The environment just isn't cooperating yet.