Bitcoin Lags Global M2 Record Near $135 Trillion

Bitcoin is trading about 48% below its October peak while global M2 money supply reached a record near $135 trillion, creating a gap between the cryptocurrency and broad liquidity. The S&P 500 is trading near its record highs.

Alphractal, which tracks liquidity and risk assets, noted the split has been most evident since early 2025. “Since early 2025, BTC has diverged sharply: while M2 continued making new highs and SPX recovered to near-ATH, BTC has compressed,” the firm wrote.

Alphractal described two ways to read the divergence. One view holds that assets trading far below liquidity typically close the gap through price gains without a drop in money supply. The other view treats the link as changing over time; the firm pointed to past divergences in 2018 and 2022 that resolved over six to 18 months and said changes in the composition of Bitcoin holders can alter the correlation.

Crypto commentator Martini Guy wrote that macro conditions have improved while Bitcoin has not yet reflected those conditions, adding that either Bitcoin will close the gap or its correlation with liquidity will break “in a way we haven’t seen for quite some time.”

Market activity this week offered mixed signals. Bitcoin rose to near $66,000 after a US-Iran deal lifted equities and risk assets, trading around $65,831 at the time of publication, up about 0.3% on the day. On-chain and trading measures showed lower activity.

Glassnode reported the recent recovery from near $60,000 looked like base-building rather than a confirmed reversal. The firm wrote: “The recovery is happening on thin ice. Spot volume collapsed 40.4% to $5.8B and Futures Open Interest declined another 3% to $30.6B, a sign the bounce is being driven by covering rather than fresh conviction. Long-side funding payments fell 22.3% and ETF trade volume dropped 38.1% to $11.1B. The market is lighter, not healthier.”

Those measures indicate the recent uptick was driven more by position covering than by new buying, according to on-chain observers. Lower trading volumes and shrinking futures interest were recorded even as global liquidity expanded.

Analysts and traders will watch flow and volume indicators in the coming weeks: spot and ETF trading volumes, futures open interest, funding rates and on-chain accumulation metrics. Those data should indicate whether Bitcoin narrows its gap with global M2 or whether the relationship changes over a longer period.