Bitcoin’s Drop Sparks New Focus on Money Supply Trends

Bitcoin’s recent price dip has stirred fresh debate around its connection to global liquidity, with analysts highlighting the relationship between BTC’s trajectory and the expanding M2 money supply.

Abra CEO Bill Barhydt pointed to this trend, noting that as more fiat floods into the system, assets like Bitcoin tend to rise in value due to their limited supply. In his view, the current pullback could precede a sharp move higher—possibly reaching $130,000 by late summer, following a brief dip near $100,000.

Despite short-term bearish signals, Barhydt sees strong fundamentals at play. He pointed to rising institutional interest, including large-scale Bitcoin purchases, as fueling long-term scarcity. While opinions differ on whether the M2 correlation holds consistently, Barhydt believes Bitcoin remains at the center of the global liquidity narrative.

Although Bitcoin dropped 8% to around $103,000, the asset remains in what some consider the middle of its liquidity-driven bull cycle. Historically, May has been a strong month for BTC, and this year’s 10% monthly gain appears to support that pattern—even amid temporary sell-offs.

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Analysts also expect a bullish June, with the global M2 supply now topping $111 trillion. With major economies leaning toward looser monetary policies due to economic headwinds, the macro backdrop could continue to benefit Bitcoin’s appeal as a hedge.

Meanwhile, Bitcoin’s role as a strategic asset is gaining political traction. Several U.S. states are pushing legislation to treat BTC as a reserve holding, and Senator Cynthia Lummis says Congress may revisit the Bitcoin reserve bill after completing stablecoin regulation.

Corporate adoption, however, remains mixed. While companies like GameStop are adding BTC to their balance sheets, others like Meta and Microsoft have passed for now—highlighting a cautious but growing acceptance of Bitcoin in institutional finance.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.