M2 money supply in the US expanded in August, setting expectations for a continued BTC bull cycle

The US M2 broad money supply kept expanding in August, reaching a new historical high. The metric also correlates with the growth of BTC, which is often seen as an alternative to a debased currency. 

The US M2 money supply reached a new peak at the end of August, with $22.13 trillion reported as of August 26. The next reporting period is expected in a month. The M2 metric is up from $22.02T at the end of July, with a slow trend of expansion. 

Since August 2024, the M2 metric has grown without stopping, adding another $1T to the bottom line. At the same time, BTC prices closely tracked the liquidity expansion, reaching an all-time peak above $124,000. The July bull market also rode on the back of another monthly uptick in M2, as Cryptopolitan previously reported. 

With another monthly expansion, BTC can fluctuate around its close M2 correlation. Usually, BTC has up to 90 days of lag when tracking the M2 chart. During correction periods, BTC lags behind M2, but catches up with the trend. The 2021 crypto boom also coincided with one of the most rapid M2 expansions in the past five years. 

Global money supply also boosts BTC

The global money supply also expanded actively in 2025, with increased liquidity in China and 19 other central banks. Since January, the M2 global supply added $7T, for a total of 112T.

The expansion of BTC in the past three months followed the active growth stage of the global M2, once again showing a pattern of tracking the additional liquidity. 

BTC also rises in correlation with stablecoin inflows, but those also reflect the overall market confidence and the trends of liquidity seeking new forms of investment. 

The M2 correlation, however, mostly holds during bull cycle phases. The relatively high M2 supply in 2022 and 2023 did not prevent a relatively long bear market, which was caused by internal crypto events. 

BTC tracks global asset expansion 

The BTC correlation to low interest rates and growing liquidity also means the asset tracks both gold and the S&P500 index. 

During the latest expansion, all three asset types retained a common trend. BTC, for now, does not outperform other asset classes, despite short-term historical rallies above the trend of stocks. 

BTC currently stands at $109,175, showing a gap with stocks and the latest additions to the M2 global and US-based supply. Historically, this gap between the BTC value and the M2 growth has set up expectations for sparking a new rally in the coming months. 

M2 is watched to determine the potential cycle peak for BTC. Currently, BTC is still close to its all-time high, but there are expectations for a year-end rally and new price records. BTC still faces pressures from crypto insiders, and may not track the M2 metric as closely during periods of increased turbulence. Despite this, M2 is watched for its general trend and the long-term effect on all markets.

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