M2 Money Supply Surges, But Bitcoin's Bullish Link Questioned
M2 Money Supply Surges, But Bitcoin's Bullish Link Questioned
The U.S. M2 money supply hit a record $22.4 trillion in January 2026, marking a significant increase from the previous year. Despite this traditional 'liquidity up, risk up' indicator, the article questions why Bitcoin has not followed with a corresponding bullish trend, exploring potential reasons for this divergence.
U.S. broad money supply (M2) reached an unprecedented $22.442 trillion in January 2026, representing a substantial increase of $922.4 billion (+4.29%) from January 2025. This metric traditionally serves as a key indicator for market liquidity and risk-on narratives, often suggesting bullish implications for assets like Bitcoin. However, the analysis critically examines why Bitcoin has seemingly failed to track this surge in M2, prompting a reevaluation of the conventional relationship between broad money supply and cryptocurrency performance.