Record High: $Near $100 Trillion Global Liquidity ‘Most Important Chart’ for Bitcoin Price

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As a researcher with a background in economics and experience in studying the relationship between traditional financial markets and cryptocurrencies, I find the current state of global liquidity and its potential impact on Bitcoin’s price to be an intriguing topic. The data shared by Philip Swift, the founder of LookIntoBitcoin, suggests that we are witnessing unprecedented levels of liquidity, with M2 nearing $100 trillion.

As a crypto investor, I’m excited about the potential upside for Bitcoin (BTC) with the escalating money supply growth in the United States. With global liquidity reaching close to $100 trillion, BTC’s price could see significant gains at its current trading level of around $71,000.

Based on a chart posted on microblogging platform X, or formerly known as Twitter, by Philip Swift, the founder of on-chain data service LookIntoBitcoin, global supply (referred to as M2) is approaching a record-breaking level of around $100 trillion.

According to Swift’s analysis, as reported first by Cointelegraph, the current level of global liquidity, specifically M2 money supply at $94 trillion, is significantly higher than during the previous Bitcoin price peak in late 2021 when the cryptocurrency reached an all-time high of $69,000. This historical correlation between Bitcoin price movements and global liquidity levels is evident through Swift’s platform that compares M2 data to Bitcoin price behavior, showing a notable increase of around $3 trillion.

Reaching a new peak, the crucial chart for Bitcoin’s current bull market sets a fresh record high. #Bitcoin

— Philip Swift (@PositiveCrypto) June 5, 2024

M2, which had dropped to $85 trillion at the end of 2022 during the crypto market downturn, has since bounced back by a significant 10%. This development aligns with other recent studies focusing on liquidity, which similarly forecast a optimistic trend for Bitcoin.

As a researcher studying the connection between Bitcoin and the U.S. M1 money supply, I find it intriguing that this relationship merits attention. The U.S. M1 money supply is currently exhibiting a noteworthy surge, having broken out of a seven-year consolidation period – the longest in Bitcoin’s history. This development implies substantial potential for further expansion, which could have significant implications for the value and adoption of Bitcoin.

It seems that institutional investors are adopting Bitcoin as a means to broaden the scope of their investment portfolios. So far this year, cryptocurrency investment products have recorded a total inflow of approximately $15 billion. A significant portion of this sum, around $14.74 billion, has been directed towards products that provide exposure to Bitcoin.

In the past week, investments in Ethereum‘s ETH-based products experienced a significant influx of approximately $33.5 million. This surge occurred following the SEC’s decision to allow the listing of spot Ethereum ETFs in the United States. Consequently, these products have accumulated around $44.5 million in total investments so far this year.

As an analyst, I’ve noticed that investments in products linked to Ethereum rival Solana ($SOL) brought in approximately $5.8 million during the previous week. This adds up to a total of $35 million in inflows so far this year. Conversely, funds concentrating on various digital assets experienced outflows amounting to around $2.7 million last week.

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2024-06-07 05:11