As many analysts on Crypto Twitter have recently discussed, Bitcoin tends to follow the global M2 with a 12-week delay.
This means that Bitcoin will rise around 90 days after the global money supply increases. With global M2 supply increasing recently, the Bulls use this as evidence that Bitcoin is about to rip.
However, timing and scale are much different than most people share.
Short-term volatility, long-term drift
Correlation indicators fixed to a 90-day delay show that liquidity trends tend to precede the directional movement of Bitcoin, while other variables, including ETF inflows, macropolicy surprises and half of the narrative, frequently modulate or obscure signals.
Since the Bull Run in 2021, the 180-day Rolling Pearson correlation oscillates between +0.95 and –0.90 for Bitcoin and future-shifted global M2 indexes.
This amplitude refers to the periodicity of the structure rather than sustained linkage, as financial expansion and contraction periods often fail to be neatly synchronized with Bitcoin’s market cycle.
Despite these fluctuations, the period since ETF between January 2024 and April 2025 maintains a more positive long-term correlation of approximately 0.65. However, this correlation is now gradually weakening.
If past cyclical trends are likely, Bitcoin could be detached from the Global M2 for several months.
Bitcoin’s price action is not yet widely liquidity driven, but is separated at key moments.
Q1 2024 calmed the global M2 movement alone, but BTC rose vertically during Spot-ETF approval, halving excitement. These divergences appeared in a negative 30-day correlation before short-term alignment was returned by April 2025, with the metric currently sitting at 0.67.
This bleeps effect is most prominent in the 30-day rolling correlation series where multiple rotations between -1 and +1 between 2024-25.
Such volatility enhances that short-term price actions in Bitcoin are heavily shaped by singular cryptographic outflow flows, such as leverage washouts and ETF rebalances. These bursts introduce noise into the signal that macro-only models cannot be separated.
Meanwhile, 180-day measurements revealed slower average revering cycles, which tend to unfold over 10-12 months. This reflects a broader policy regime, including hybrid scenarios such as quantitative mitigation, liquidity tightening, or stealth injection through liquidity facilities.
In the direction, Bitcoin relies on addictions that are sensitive to financial base shifts, but this window of response appears flexible.
Magnitude mismatch and timing dislocation
The latest liquidity inflation since September 2024, the global M2, rose by around 2%, coincides with a nearly 70% spike in BTC spot prices, and is currently trading at around $93,800.
According to TradingView data, the global M2 index was 92.9 as of April 23rd. An imbalanced price response is a point for additional catalysts that go beyond amplified sensitivity or traditional fluidity models.
The ETF flow and Stablecoin credit extensions represent parallel flowable streams that are not registered within standard M2 constructs.
As observed in early 2024, when large-scale net creation occurs within a Bitcoin ETF, it generates directional purchases without visible in macro currency aggregates. As a result, it becomes an increasingly elastic relationship that the global M2 acts as a background rhythm than the prediction engine.
The gradient of M2 momentum may provide more usefulness than absolute levels. A slower M2 means that the tail is weakened, even if the correlation remains positive.
This perspective reflects market pragmatism, highlighting the relative changes in fluidity velocity over static cross-section values.
Policy, event risk, and structural noise
Three macro variables can complicate correlation measures over the second quarter of 2025.
First, US debt cap volatility and general Treasury account changes could mechanically alter dollar liquidity. Second, medium-term guidance on rate reduction in FOMCs could reinforce or disrupt existing trajectories. Third, legislative movements over tariffs could constrain US liquidity and affect the broader crypto credit cycle.
Local variance further limits the clarity of the M2 signal. With the US, China and Japan making up the majority of the M2 index, the policy tracks diverging between these economies diluting the global average. Deviating from collective mitigation or tightening, central banks introduce noise that can distort composite diagrams and mislead macromodel supporters.
Finally, the revised version of the M2 numbers is not trivial. Reporting general delays and re-corrections can retrospectively alter the correlations calculated in real-time, complicating backward inference and strategy calibration.
Re-adjust the model
The core paper that “liquidity drives Bitcoin” remains in directional valid, but the elasticity of this relationship identifies the limitations of applying macromodels alone.
ETF market structure, half-cycles, regulatory policies, discretionary trading flows, and other macro indicators inject sufficient complexity to disrupt clean macro overlays.
Traders who interpret Bitcoin M2 correlations as key signals must fight against structural breakdowns, regime shifts, and landscapes where alternative liquidity conduits continually reconstruct inputs.
Liquidity is the oxygen of risky assets, but Bitcoin currently has multiple oxygen tanks.
