- Global M2 money supply across major economies has grown by 8% year-to-date in 2025
- China’s M2 supply has surpassed $46.6 trillion, growing at 8%, while US M2 growth is near 1%
- This liquidity divergence is seen as a potential long-term driver for Bitcoin’s valuation
Global liquidity is once again becoming a central topic in crypto market discussions, with analysts pointing to rising M2 money supply levels as a potential key driver for crypto markets.
M2 represents the broad money supply circulating in an economy, including cash, savings, and money-market deposits. From a historical perspective, notable increases in M2 have correlated with stronger demand for risk assets, including crypto.
The Key Data: A US-China M2 Divergence
According to Forbes, M2 money supply across major economies has grown by roughly 8% year-to-date in 2025, pointing to an environment where there is more cash available in the financial system.
Interestingly, recent data from TradingEconomics highlights that China’s M2 supply has surpassed that of the US. As of late 2025, China’s M2 sits at approximately CNY 335.3 trillion (around $46.6 trillion) and has grown more than 8% in the past year.
Meanwhile, the US M2 money supply has grown at a far slower pace, hovering near 1% year-to-date, after it actually shrank during the Fed’s period of raising interest rates in 2023 and 2024.
Related: US-China Détente Seen as Bullish for Blockchain Tech Sharing, Regulation
The split is notable because liquidity expansion in large economies often acts as a boost for global markets. While US financial conditions remain tighter, China’s rapid money issuance suggests more liquidity is entering its domestic markets.
What’s interesting about this is that the excess cash could eventually find its way into global investments and, by proxy, crypto.
How Does Global Liquidity Impact Bitcoin Price?
Generally, when the global money supply grows, Bitcoin’s price often rises in the months that follow, though not right away. One estimate suggests that for every 1% increase in global money supply, Bitcoin’s price could eventually go up 2-3%, but only if the overall market mood is positive.
However, rising M2 alone is not enough to push the crypto market higher. If global investors remain cautious due to geopolitical tensions, ETF outflows, or slowing retail participation, liquidity may not translate into immediate buying pressure.
As such, if the world’s major economies, especially the US, continue to increase the money supply and ease policy, it could create a supportive environment for Bitcoin and other cryptocurrencies into 2026.
Related: Bitcoin Bull Run at a Major Crossroads As Whales Offload; What’s Next?
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