Beyond the Hype: The Real, Complicated Relationship Between Bitcoin and the Money Printer.

Do M2 and Bitcoin really move together?

What truly moves Bitcoin’s price? For years, the narrative has been hijacked by celebrity tweets, retail FOMO, and arcane technical charts. But if you strip away the noise and look at the raw data, a much more powerful and fundamental force comes into view: liquidity. Specifically, the ebb and flow of the U.S. M2 money supply, a broad measure of money circulating in the economy.

To get to the bottom of this, I ran a forensic analysis of the US dollar financial system from Bitcoin’s inception in 2009 through early 2025. The goal was to rigorously test the popular crypto thesis that “money printer go brrr” directly translates to “Bitcoin price go up.” By comparing Bitcoin against the M2 money supply, and benchmarking its behavior against traditional assets like gold and the S&P 500, the data reveals a story that is far more nuanced, fascinating, and ultimately, more useful than the simplistic memes would have you believe. The relationship is real, but it’s not the ironclad law many think it is. It’s a slippery, shape-shifting connection that depends entirely on the prevailing economic regime.

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The Myth of Constant Correlation

The first and most immediate surprise when digging into the numbers is that there is no stable, consistent correlation between Bitcoin and the money supply. If Bitcoin were a simple, direct hedge against monetary inflation, you would expect a consistently high and positive correlation. The data shows the exact opposite.