Bitcoin Price May Fall Despite Global M2 Jump
The crypto market has yet to recover from recent turbulence, with signals suggesting a further decline in the coming weeks. Capital flow has been a major contributor to this weakness, particularly as stablecoin supply has fallen short of demand.
Global M2 Money Supply Surges by $1 Trillion
According to Alphractal, global M2 money supply jumped by roughly $1 trillion in a single week, with China accounting for 80% of that increase, or $800 billion. This surge in liquidity could have a positive impact on stocks, crypto, and real estate, but its effect on Bitcoin is less clear.
Bitcoin's Performance in Relation to Global M2
Historically, declines in global M2's year-over-year growth have marked Bitcoin price bottoms, which have also opened the door for broader rallies. However, the recent surge in global M2 has not led to a decline in its year-over-year growth, suggesting that Bitcoin and altcoins could still slide lower before a reversal emerges.
Limited Exposure to Bitcoin from China's M2 Surge
China, which accounted for the majority of the recent global M2 surge, has limited exposure to Bitcoin, the largest risk asset in the crypto market. Hong Kong Bitcoin spot exchange-traded funds (ETFs) absorbed just 48.1 BTC since August began, worth roughly $3.057 million. This suggests that the impact of China's M2-driven liquidity surge on Bitcoin is likely to be limited.
US Flow Remains Key Factor for Bitcoin
The US, which has seen its money supply expand against M2 readings from other economies, remains the key factor to watch for Bitcoin. The latest US money-supply figure is $23.16 trillion, and weekly inflows across crypto ETFs reached roughly $1.10 billion, the strongest weekly inflow since 17th April 2026.
Near-Term Impact on Bitcoin and Altcoins
The recent surge in global M2 may have helped to calm the market mood, which has been eased by quieter Middle East war headlines. This calmer market mood could filter through to Bitcoin and select altcoins in the near term, potentially supporting a recovery in the crypto market.
