Global Liquidity & Bitcoin
This chart illustrates the year-over-year growth in the global money supply (M2) aggregated from the top 21 central banks, compared to the price of Bitcoin (USD). The M2 Global measure includes cash, checking and savings deposits, money market accounts, and small time deposits under $100,000.
Historically, Bitcoin bull markets have aligned with periods of increased global liquidity. Keep an eye on the relationship between these two metrics to gauge broader macro trends.
US Inflation
This chart illustrates the year-over-year growth in the Consumer Price Index (CPI), which measures the average price change for a basket of goods and services, acting as the economy’s primaryinflation gauge.
US Inflation Trends
The Consumer Price Index (CPI) tracks the average price change for a basket of goods and services, acting as the economy’s primary inflation gauge.
Monitoring year-over-year CPI growth helps investors understand the real spending power of consumers and how monetary policy might evolve. Elevated CPI often prompts tighter policy, while cooling inflation can pave the way for more accommodative conditions.
Why Real M2 Matters
Real M2 adjusts the broad money supply for inflation using the CPI index. It reflects the true purchasing power of dollars in the economy.
Fed policy → Real M2: Higher interest rates slow credit creation and lead to falling real M2.
Real M2 → Liquidity: When the real money supply contracts, households and businesses pull back on spending and borrowing.
Liquidity → Risk Assets: Housing activity and crypto prices often lag changes in liquidity. Expanding real M2 tends to coincide with stronger performance across risk assets.
This framework explains why crypto bull markets frequently align with rising real M2 and why sustained contraction warns of a tougher market backdrop.
Key Macroeconomic Metrics
Real M2 Money Supply: Tracks actual liquidity and purchasing power in the economy.
Nominal M2: Total money available before adjusting for inflation.
CPI: Deflator used to convert nominal M2 to real terms.
Housing Starts / Permits: Early signal of future construction activity.
Mortgage Rates: Major driver of housing demand.
Home Price Index: Tracks trends in residential property values.
Lending Standards: Gauges how easy banks are making credit for consumers.
Federal Funds Rate: Headline indicator of how tight or loose policy is.