Bitcoin's Downturn to Halt as M2 Money Supply Turns Positive, Sparking Inflation Hedge Speculations
Summary:
The recent downturn in Bitcoin sales is expected to slow due to a positive turn in the M2 money supply's year-over-year for the first time since November 2022, a common indicator for investors to seek hedges against inflation. With Bitcoin's net outflows and a 9.75% price decrease over the past month, this positive shift in the M2 money supply, traditionally signaling high inflation periods, has led to speculation on Bitcoin's future performance. Renowned trader and financial author Oliver L. Velez and crypto trade account InvestAnswers have both given bullish outlooks on Bitcoin's future, advising followers to buy on any dips and disregard negative predictions.
A recent downturn in Bitcoin sales is anticipated to slow following the M2 money supply's positive turn year-over-year for the first time since November 2022. This traditionally signals investors to commence seeking safeguards against inflation. Cryptocurrency analytics firm Glassnode observed an overall increase in Bitcoin "net outflows" in April, suggesting persistent selling pressure, as noted in a May 2nd post on X. This coincides with a 9.75% decrease in Bitcoin's price over the last 30 days, currently listed at $59,586 according to CoinMarketCap data.
Meanwhile, the M2 Money Supply, which is the total estimation of liquid cash and short-term bank deposits nationwide, turned positive year-over-year on May 1. This implies an overall growth of money in circulation, typically prompting investors to focus on assets that do well during high inflation periods. The Bitcoin and cryptocurrency markets have traditionally begun to outperform traditional financial markets when the global M2 supply increases.
This positive turn for the M2 money supply has led bitcoin traders to speculate on the cryptocurrency's value, considering the supply has been in the negative since November 2022. Renowned trader and financial author Oliver L. Velez announced during a May 2 post on X that “M2 Money Supply is positive year-over-year” for the first time. He offered an extremely bullish outlook to his 49,800 followers, advising them to purchase all possible dips and disregard any doom predictions for Bitcoin.
Crypto trading account InvestAnswers, with a following of 204,700 on X, posted on May 3 declaring an imminent explosion of the M2 money supply that will propel Bitcoin skywards. Raoul Pal previously noted in October 2023 how significant global M2 is, marking the point when Bitcoin begins overshadowing the NDX and cryptocurrency becomes astoundingly impactful.
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Published At
5/3/2024 9:11:03 AM
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