Decoding Market Moves: Bitcoin Traders Eye US M2 Supply

Mark Moss, a radio host and avid supporter of cryptocurrencies, promotes Bitcoin as the ultimate gauge for assessing the market’s overall health. Moss questions the conventional emphasis on earnings and economic data, advocating a shift towards considering Bitcoin’s role in evaluating market conditions.

In a recent X post, Moss reaffirmed the earlier mentioned preview, emphasizing the remarkable track record achieved by billionaire investor Stanley Druckenmiller.

Over the past two decades, the radio host points out that Druckenmiller’s firm has consistently delivered an impressive annual return of approximately 30%, attributed to its strategic adherence to liquidity.

To emphasize and substantiate the efficacy of this methodology, Moss presented a chart illustrating the correlation between the M2 money supply in the United States and the trend of Bitcoin prices since 2013.

The analyst expresses confidence in the robust market data, asserting that Bitcoin is a dependable indicator for monitoring the overall health of the market, given its consistently close and positive correlation with the M2 supply.

Bitcoisdata’s Highlight: Bitcoin & M2 Connection

However, Bitcoisdata highlights a notable increase of approximately 38% in the M2 money supply over the last four years. During this period, Bitcoin exhibited a robust performance, surpassing the broader market.

Starting from early Mar 2020, when the United States Federal Reserve initiated interventions and lowered interest rates in response to the COVID-19 impact, BTC experienced an impressive surge, nearly reaching a tenfold increase.

Simultaneously, the stock market, fueled by abundant liquidity, witnessed significant growth. In contrast to conventional assets, which derive their valuation from factors such as earnings or macroeconomic indicators like interest rates, Bitcoin’s value is influenced by the interplay of supply and demand dynamics. The key determinant of this relationship is predominantly the liquidity conditions, with a significant influence from the policies of the United States central bank.

Moss suggests that by observing the price movements of Bitcoin, investors can obtain valuable insights into the broader market’s sentiment regarding risk and liquidity.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.