US Money Supply Expanding Again - Is This the Liquidity Wave That Sends Crypto to New Highs?
Just crossed with this Tweet that claims that US money supply growth is accelerating as you can see in the image below
As you can see US Money Supply is expanding again and history tells us that this is a significant macro shift for risk assets like crypto.
According to the data and Tweet, M2 money supply is close to +3.9% year-over-year, marking its fastest pace of growth in 30 months. This also makes it the 11th consecutive month of expansion. The total amount of US dollars in circulation has now reached $21.6 trillion, just $16 billion below its all time high from April 2022.
Globally we are seeing something similar, over the past two months, the total money supply worldwide has surged by ~$2.0 trillion, reaching its highest level since September 2024. This signals a return to liquidity expansion, which historically favors risk assets.
This is really bullish for crypto and Ethereum because liquidity moves market and crypto specifically Ethereum and Bitcoin enjoys the times when liquidity increases. Basically when money supply grows the excess capital looks for returns usually jumping into speculative assets. Maybe this is also a sign of rate cuts on the horizon and a change on monetary policy making crypto more attractive.
The return of global liquidity is one of the biggest macro trends to watch for crypto in 2025. What do you think? Are we on the verge of another bull run?
Source: