The Fed’s Next Move Could End the Crypto Bloodbath
Does this mark the bottom for crypto? Let's explore!
The M2 money supply just spiked +3.9% year-over-year in January—the fastest jump in 30 months.
More cash is flooding the system, and it’s starting to look like the crypto bloodbath might be nearing its bottom.
Here’s the breakdown:
M2 Money Supply Growth: Indicates that more money is circulating in the economy, often leading to increased spending and economic activity.
Continuous Expansion: The growth represents the 11th consecutive month of money supply expansion, suggesting a sustained trend of increasing liquidity in the economy.
Global Money Supply Increase: The global money supply has increased by roughly $2 trillion over the past two months, reaching its highest level since September 2024, which means increased liquidity.
Total US Dollars Circulation: The total amount of US dollars in circulation has reached $21.6 trillion, just shy of an all-time high set in April 2022.
To top it off, Polymarket is now projecting the quantitative tightening cycle we’ve been in since 2022 has a 100% chance of ending before May!
So, what does this mean for your bags?
More cash in the system typically drives interest rates down—cheap borrowing, more spending, and a tailwind for risky assets like crypto.
Historically, Bitcoin’s price has tracked global M2 growth like a shadow; when M2 jumped 4% in 2020, BTC soared 50% in three months.
The last piece? Rate cuts.
Two or three in 2025 are now at 22% odds each on Polymarket, a sharp pivot from the ‘no cuts’ gloom just weeks ago.
So, is this market at the bottom of the crypto bloodbath?
It’s starting to seem that way when you get out of your feelings and look at the macro factors lining up.
All eyes are on the next FOMC on March 19th, where we’ll see if Jerome Powell pivots from hawkish to dovish.
If he even hints at ditching QT in May, expect markets to rip harder than a moon boy shilling his bags on X.