Want to understand why Bitcoin skyrocketed? The key is looking at the global money supply.



Simply put, the two core driving factors of Bitcoin are M2 money supply and the benchmark interest rate. When these two indicators rise, Bitcoin tends to surge as well. Conversely, Bitcoin acts like a weather vane for global liquidity—more money means it takes off; less money means it shrinks.

Historical data confirms this logic. Each major Bitcoin rally almost coincides with the timing of global M2 expansion. The "money printing and rate cuts" cycles are exactly when Bitcoin takes flight.

The most typical example is the 2020 bull market. Many attribute the surge to Bitcoin halving, but halving was just the spark. What truly triggered the explosion? It was the Federal Reserve's unprecedented "large-scale liquidity injection" to counteract the pandemic shock. At that time, the Fed lowered the benchmark interest rate to near zero and started printing money, causing M2 supply to surge. It was within this flood of liquidity that Bitcoin jumped from a few thousand dollars to over twenty thousand.
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MeltdownSurvivalistvip
· 4h ago
That's correct, but you didn't mention the most critical point—when the Federal Reserve starts to raise interest rates and tighten, BTC will have to take the hit. The decline in 2022 was a bloody lesson. So instead of just watching the halving, it's better to keep an eye on what those folks at the Federal Reserve are saying. Having more money definitely leads to takeoff, but the problem now is that they are starting to tighten liquidity again. What do you think?
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NotFinancialAdvicevip
· 4h ago
That's correct. Essentially, it's a money-printing game, and Bitcoin is fundamentally just a shadow of liquidity.
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TokenRationEatervip
· 4h ago
That's right, it's all about the money printing machine. I saw clearly during that wave in 2020, when the Federal Reserve started printing money, the whole world followed suit. The classical analysts are still talking about technical analysis, but they don't realize they've been beaten by macroeconomics long ago. When M2 increases, everything rises, including BTC. That's the reality. It's hilarious—some people are still researching on-chain data, but they're completely looking in the wrong direction. --- The wallet is the real daddy; everything else is just stories. --- This logic should have been clear long ago: liquidity determines everything. Otherwise, why did it spike from four digits to five digits back then? --- Wow, I was wrong all along. I thought it was halving, but it turns out the Federal Reserve was just messing around. --- That's a bit harsh, but it really hits the point. Let's wait and see the next rate cut show. --- Speechless, finally found the real culprit this time.
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BankruptWorkervip
· 4h ago
Basically, it's the Federal Reserve printing money, and we get to enjoy the benefits. Now that we're short on money, we'll just go hungry. Hey, wait a minute, the Federal Reserve is about to cut interest rates again. Will Bitcoin fly another wave? Really, whenever M2 expands, I know it's time to get on board. This logic has actually been seen through for a long time, but the problem is we don't have money. Wait, now the global tightening is happening, why is Bitcoin still rising? This doesn't make sense. That's very true, but the problem is I don't have money to get on board. It's driving me crazy. Damn, I wish I had gone all in back in 2020. Now I can only watch as a worker with longing eyes. Historical laws are laws, but we don't have the capital to participate. Damn. This logic is fine, but I just can't execute it. Who told us we're just workers? M2 expansion = takeoff. Now I’ve learned that, but I’m still a broke guy.
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MoneyBurnerSocietyvip
· 4h ago
Haha, you're right. I was among those who lost all their bottom-fishing funds during this wave of "mass liquidity injection"... As soon as M2 expanded, I rushed in, only to end up becoming a contrarian indicator. Now, professional leek growers are consistently making profits.
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FOMOmonstervip
· 4h ago
Exactly right, it's all about printing money, truly brilliant. --- Wait, so if the Federal Reserve is going to raise interest rates now, should I run away? --- I totally missed the 2020 wave, now I regret it to death. --- I need to keep a close eye on M2 and the benchmark interest rate; I feel like those are the keys. --- The halving is just a trigger; that statement is brilliant. Turns out it's all central banks playing games. --- According to this logic, is there still a chance for Bitcoin this year? It depends on the Federal Reserve's stance.
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