A financial analyst publicly criticized the use of global M2 money supply data to predict Bitcoin (BTC) price movements, stating that such analysis is mathematically unreasonable and misleading.
This criticism came as global M2 money supply reached an all-time high. Several analysts are predicting similar trends for BTC.
Can Global M2 Monetary Data Be Trusted to Predict Bitcoin Prices?
An analyst named TXMCtrades shared his thoughts on X (formerly Twitter). He specifically pointed out a chart by macro investor Raoul Pal comparing Bitcoin's price to global M2.
I know many of you want to see the updated version of the BTC vs Global M2 chart. Here it is… just a very small part of the weekly Macro Investing Tool (MIT) as part of RV Plus.
— Raoul Pal (@RaoulGMI) April 16, 2025
It is time, give or take a few days… pic.twitter.com/dTF7RET5OL
TXMCtrades argued that charting global M2 daily or weekly is fundamentally incorrect because the underlying data update frequency is inconsistent. He explained that this amplifies short-term volatility and fails to accurately provide long-term trends.
"Listen, the US only updates M2 weekly, and all other countries update monthly, so you cannot create a daily or weekly time series of 'Global M2'!" – TXMCtrades
He explained that many countries have not updated figures since February, creating large gaps in the dataset. TXMCtrades claimed these discrepancies primarily reflect foreign exchange (FX) volatility rather than actual money supply dynamics.
"You are looking at the weighted dollar exchange rate of M2 95% of the time. Do better math!" he added.
He also highlighted broader concerns about the misuse of global M2. The analyst emphasized that China, which accounts for 46% of global M2, is the only major economy that has peaked in dollar terms since COVID.
"They are trying to get out of years of debt deflation, and they are doing quite a bad job. Their M2 is going straight up," TXMCtrades mentioned.
Meanwhile, US M2 remains below its 2022 peak. The analyst also stressed that Bitcoin is growing at its slowest pace since inception, except for the 2022-2024 period. This suggests the US is not experiencing rapid monetary supply growth, which could impact inflation or other economic trends.
TXMCtrades argues that these differences further weaken global M2's credibility as a predictor of Bitcoin price movements. The analyst also objected to the "arbitrary offsets" used by several analysts to align global M2 with Bitcoin price movements.
For example, Raoul Pal suggested a 12-week delay between global M2 and Bitcoin prices. Meanwhile, Colin Talks Crypto suggests a 15.4-week delay. Mr. Wall Street estimates the delay between 10.7 and 15 weeks. Some have even extended the M2 correlation to altcoin price predictions, such as Solana (SOL).
"SOL followed global M2 money supply (+100 days) in its last two rallies. If this continues, SOL will rise significantly within the next two weeks," posted analyst Curb.
Nevertheless, the analyst said the offsets are often arbitrary and do not reflect the actual dynamics of money supply or asset prices.
"Money is money, it has no time to wait," he argued.
The analyst suggested these models are overfitted to recent historical data and lack a robust foundation for predictions. Finally, TXMCtrades urged raising the rigor of financial analysis. He called on analysts to adopt more mathematically sound approaches to understand cryptocurrency price dynamics and "stop spreading fraudulent analysis".
