Is Bitcoin the Answer to Global Money Supply Expansion?

Bitcoin has emerged as a major beneficiary of the global money supply expansion, according to Jamie Coutts, Real Vision’s top crypto analyst.

Over the past two years, an estimated $1.1 trillion has flowed into Bitcoin and similar assets, highlighting its growing role as a store of value.

Coutts points to the M2 money supply—representing cash, savings, and money market funds—which hit a low of $94 trillion in late 2022. By 2023, this figure rebounded to $105 trillion, coinciding with Bitcoin’s market cap growing fivefold, adding $1.5 trillion in value. This movement, he suggests, reflects a shift of approximately 10% of the newly created money into Bitcoin, gold, and equities, signaling a pivot away from fiat systems.

Global M2 bottomed at $94T in Q4 2022 and has since climbed to $105T. During this period, Bitcoin’s market cap 5x’ed, adding $1.5T. In other words, 10% of the new money supply has leaked from the fiat system into the emerging global reserve asset of Bitcoin (gold, equities etc… pic.twitter.com/w0vWIMufbg

— Jamie Coutts CMT (@Jamie1Coutts) November 28, 2024

Looking ahead, Coutts predicts that the global M2 supply could expand to $118 trillion by 2026. Such growth, if realized, may accelerate Bitcoin’s adoption as an alternative financial asset. With its rapid market appreciation, Bitcoin could continue to attract attention from those seeking refuge from traditional monetary systems.

Coutts argues that Bitcoin’s potential extends beyond individual investors. He views it as a solution for businesses and governments grappling with economic instability. In his words, Bitcoin represents “a critical escape route” amid expanding money supplies and uncertain fiscal policies, positioning it as a cornerstone of a new financial era.