Bitcoin Declines, but US Dollar Supply Reaches ATH US$22.2 Trillion
The money supply of the United States (M2 money supply) has reached a record high of US$22.2 trillion on Wednesday (24/09), indicating an increase in liquidity within the economy. Theoretically, this liquidity surplus has the potential to drive capital flows into risk assets such as cryptocurrencies and stocks.
However, amid the surge in dollar supply, Bitcoin (BTC) has still declined to the level of US$111,000 since the beginning of the week, and the cryptocurrency market as a whole has shown weakness. Popular altcoins like Ethereum (ETH), XRP, and Solana (SOL) have also experienced significant declines over the past week.
Despite this, there is a view that the growth of the money supply could trigger inflation if it exceeds economic growth. These inflation concerns could reduce investor risk appetite and pressure central banks to raise interest rates again.
Historically, Bitcoin's movements often follow the global and US M2 supply with a lag of three to six months, especially during liquidity shifts. Although Bitcoin has previously experienced brief spikes when M2 growth was low, price surges driven by M2 increases tend to result in more sustained upward trends. For example, when Bitcoin surged past US$100,000 in April 2025, the response lag was only about one to two weeks.
Crypto analyst Auris predicts that with the expansion of global money supply, the next Bitcoin target could reach around US170,000. Some analysts even estimate that BTC's price could touch US200,000 by the end of 2025, driven by increasing institutional demand through ETFs and corporate adoption.
