**Global M2 Money Supply Growth Signals Potential Boost for Bitcoin in 2025**
Global M2 money supply across major economies has grown by approximately 8% year-to-date in 2025, highlighting an environment with increased liquidity in the financial system. Notably, China’s M2 supply has surpassed $46.6 trillion, growing at an impressive rate of over 8%, while the US M2 growth remains near 1%. This divergence in liquidity expansion between two of the world’s largest economies is garnering attention as a potential long-term driver for Bitcoin’s valuation.
### Understanding M2 and Its Importance
M2 represents the broad money supply circulating in an economy. It includes cash, savings accounts, and money-market deposits—essentially the liquid assets readily available within the financial system. Historically, significant increases in M2 have correlated with stronger demand for risk assets, including cryptocurrencies.
### The US-China M2 Divergence
According to Forbes, the M2 money supply in major economies has risen roughly 8% year-to-date in 2025, signifying more cash availability. Recent data from TradingEconomics reveals that China’s M2 supply has now surpassed that of the US. As of late 2025, China’s M2 stands at approximately CNY 335.3 trillion (around $46.6 trillion), growing over 8% in the past year.
In contrast, the US M2 money supply has experienced much slower growth, hovering around 1% year-to-date. The US money supply even contracted during the Federal Reserve’s interest rate hikes throughout 2023 and 2024.
This split is significant because liquidity expansion in large economies often acts as a catalyst for global market growth. While US financial conditions remain relatively tight, China’s rapid money issuance indicates substantial liquidity entering its domestic markets. Over time, this excess cash could flow into global investments, including the cryptocurrency market.
### How Does Global Liquidity Impact Bitcoin’s Price?
Generally, increases in the global money supply tend to be followed by rising Bitcoin prices, though the effect is not immediate. Some estimates suggest that for every 1% increase in global money supply, Bitcoin’s price could eventually rise by 2-3%. However, this relationship holds primarily when overall market sentiment is positive.
It’s important to note that rising M2 alone doesn’t guarantee a crypto market rally. Factors such as geopolitical tensions, ETF outflows, and waning retail participation can dampen the impact of increased liquidity on buying pressure.
### Looking Ahead: What to Expect for Bitcoin in 2026?
If major economies, particularly the US, continue to increase their money supply and pursue more accommodative monetary policies, it could set the stage for a supportive environment for Bitcoin and other cryptocurrencies in 2026.
As global liquidity becomes a central theme in crypto market discussions, investors and analysts alike will be watching closely to see how these monetary trends unfold and what they mean for the future of digital assets.
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