Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnSquareMore
U.S. M2 Money Supply Hits Record High of Nearly $22T

U.S. M2 Money Supply Hits Record High of Nearly $22T

2025/07/02 11:15
By:

A comprehensive measure of money circulation in the U.S. has risen to new highs, a signal of economic growth that posts contradictory messages for the path of bitcoin

BTC$107,696.83
.

The M2 money supply, which includes hard currency and bank and money market mutual fund deposits that are relatively liquid, rose to a record $21.94 trillion at the end of May, topping the previous peak of $21.72 trillion in March 2022. Year-on-year growth rate matched April's 4.5%, which is also the highest in nearly three years.

U.S. M2 Money Supply Hits Record High of Nearly $22T image 0

For cryptocurrencies, the message is muddled. Typically, a growing money supply is taken as a signal of looser financial conditions and a growing economy that promotes greater investor exposure to riskier assets.

On the other hand, money supply growth can lead to inflation if it outpaces the economy. Inflation concerns could reduce investor risk-taking and pressure the Federal Reserve to raise interest rates.

In recent years, a rising M2 has had a lagged impact on the Fed's preferred inflation measure, the personal consumption expenditures (PCE) inflation. The PCE began rising in February 2021, a year after M2 growth began soaring in February 2020 and followed the M2 growth lower in 2023, St. Louis Federal Reserve noted in a blog post.

If history is a guide, the ongoing uptick in the M2 growth rate could contribute to inflation in the coming months, making it more challenging for the Federal Reserve to cut rates to as low as 1%, as recently called for by President Donald Trump.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

Ethereum Privacy’s HTTPS Moment: From Defensive Tool to Default Infrastructure

A summary of the "Holistic Reconstruction of Privacy Paradigms" based on dozens of speeches and discussions from the "Ethereum Privacy Stack" event at Devconnect ARG 2025.

ChainFeeds2025/11/28 22:25
Ethereum Privacy’s HTTPS Moment: From Defensive Tool to Default Infrastructure

Donating 256 ETH, Vitalik Bets on Private Communication: Why Session and SimpleX?

What differentiates these privacy-focused chat tools, and what technological direction is Vitalik betting on this time?

BlockBeats2025/11/28 22:02
Donating 256 ETH, Vitalik Bets on Private Communication: Why Session and SimpleX?