Global M2 money supply grew by roughly $1 trillion in a single week, with China responsible for about 80% of that increase — some $800 billion — while U.S. M2 climbed to $23.16 trillion. On paper, a liquidity injection of that size would typically be read as bullish for Bitcoin, whose price has historically tracked global money-supply growth. This time, analysts are less convinced the surge translates into fresh demand for BTC.
The skepticism centers on where the new liquidity is actually flowing. Hong Kong's spot Bitcoin ETFs, the most direct regulated channel for mainland-adjacent capital to reach Bitcoin, absorbed just 48.1 BTC since the start of August — worth roughly $3.06 million, a fraction of the headline M2 figure. Mainland China's continued restrictions on cryptocurrency trading mean that, as one read on the flows put it, "Hong Kong capital has historically reached Bitcoin through official channels, including ETF providers, in thin amounts."
US ETF Demand Still Doing the Work
By contrast, U.S. spot Bitcoin ETFs logged their strongest weekly inflow since mid-April, pulling in roughly $1.1 billion. That gap underscores the current dynamic: American institutional demand, not Chinese liquidity expansion, remains the variable most likely to move Bitcoin's price in the near term, regardless of how large the global M2 headline number looks.
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The Bigger Question: Has Bitcoin Decoupled From M2?
The report also flags a deeper structural concern. Historically, a decline in year-over-year M2 growth has marked Bitcoin price bottoms, but that pattern hasn't shown up this cycle — YoY M2 growth has stayed positive throughout, which some analysts read as a signal that Bitcoin and altcoins could still slide lower before any reversal. That concern echoes a broader debate playing out among macro analysts: Bitcoin has traded largely uncorrelated with global M2 since mid-2025, even as a long-run statistical estimate puts Bitcoin's elasticity to M2 at 2.65 — meaning a 1% rise in global money supply has historically corresponded to a 2.65% move in BTC's price. Some analysts see the current gap as Bitcoin trading well below its liquidity-implied fair value and therefore primed for a catch-up rally; others warn that this kind of decoupling has previously preceded major market tops.
For now, the two data sets point in different directions: a record global liquidity injection on one side, and a Bitcoin market that has spent over a year showing little direct sensitivity to it on the other.
