CoinDesk
Sep 25, 2025
20 1

Bitcoin’s Break from Global M2 Linked to U.S. Treasury Actions

Bitcoin and Global M2 Money Supply Correlation

  • Raoul Pal highlights a chart showing bitcoin's correlation with global M2 money supply, typically lagging by 12 weeks.
  • The model suggests bitcoin could reach $200,000 by the end of 2025 if the correlation holds.
  • Since July 16, this correlation has broken down as bitcoin prices stagnate despite rising M2.

Treasury General Account (TGA) Impact

  • The U.S. Treasury's TGA actions have drained liquidity by issuing $500 billion in bonds since July, affecting risk assets like crypto.
  • The TGA's balance stands near $800 billion, leading to reduced capital for investment.
  • Pal anticipates that the liquidity drain will end soon, potentially allowing bitcoin's rally to resume.

Market Observations

  • Despite the liquidity issues, tech stocks and gold are hitting new highs, indicating ongoing risk appetite.
  • The deviation between bitcoin and global M2 may also be due to selling pressure from long-held coins.