The cryptography market is still evolving according to global money trends, but a new debate confuses traders. Meanwhile, the popular analyst Virtualbacon recently underlined a big problem, indicating how different sources define the M2 money supply and global liquidity, leading to mixed market signals.
Some merchants see bullish signs in the graph, while others do not do so, and reason comes down to the way M2 is measured. Does M2 increase, or do some trackers mix it with global liquidity?
Bitcoin and M2 M2
For Bitcoin, the growth of the M2 money supply is a key factor in price movements. M2 measures available cash reserves, including cash deposits, check deposits, savings, market accounts, funds and deposits under $ 100,000.
When M2 develops, more money is available to invest and the advantages of Bitcoin as an act sensitive to liquidity. An increase in M2 often results in an increase in Bitcoin prices, as more and more investors pay money in digital assets.
The global liquidity of M2 is increasing and history suggests that risk assets like Bitcoin could soon react. As of April 1, the monetary mass of Global M2 reached a historic summit of $ 108.4 billions of dollars, marking an increase of 3.7% compared to its minimum of 2025 of 106 billions of dollars recorded on November 4.
Altcoins react to global liquidity
Altcoins, on the other hand, are more influenced by global liquidity, which includes central banking assessments and overall risk of risk investments. When global liquidity increases, investors become more willing to take risks, benefiting altcoins.
This is why altcoins often see more volatility compared to bitcoin. The larger net than global liquidity has an impact on risk assets and altcoins dance on this pace.
Things to keep in mind
The important lesson for crypto traders is to understand the important data for their investments. The Bitcoin price is closely linked to the money supply of M2, while altcoins react more to global liquidity trends.
