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Analysts Split on Whether Record Money Supply Will Boost Bitcoin
The global and United States money supplies are at record highs, which is typically a bullish sign for Bitcoin markets – or so the narrative goes. However, some analysts are questioning this relationship, pointing out that it may not be as straightforward as previously thought.
Typically, an increase in the money supply would lead to increased inflation and devaluation of fiat currencies, pushing investors towards alternative assets such as cryptocurrencies like Bitcoin (BTC). Nevertheless, the correlation between M2 money supply and Bitcoin prices has come under scrutiny lately.
On Monday, crypto YouTuber Lark Davis noted that Bitcoin markets are lining up with the 100-day offset of the M2 money supply. This observation led him to predict a “parabolic move” that could propel the asset price to $250,000 over the next few months. However, some analysts have refuted this theory by highlighting the fact that the relationship between M2 and Bitcoin prices falls apart when the time frame is altered.
Protos debunked the correlation between M2 money supply and Bitcoin prices on July 7, stating that the connection appears strong only when focusing on a specific time range. However, once you zoom out to earlier periods, the narrative disintegrates. In fact, during the FTX collapse in November 2022, M2 hit new highs while Bitcoin’s price tanked.
The debate highlights the ongoing complexities surrounding the cryptocurrency market. The increasing global money supply has sparked a heated discussion among experts and traders alike on whether this will have a direct impact on Bitcoin’s value.
Source: cryptopotato.com
