The global M2 broke the 103 trillion record, why did Bitcoin fall 33%?

According to Woofun AI, the global money supply has broken through the $103.66 trillion mark, yet the price of Bitcoin and gold did not rise as expected; on the contrary, there was a significant divergence. This anomaly sparked heated discussions on the X platform. Although most traders expected the inflow of capital to boost assets, actual market performance revealed a deeper breakdown in macrologic.

Structural differences in macro data are key to understanding this divergence. In August, the Federal Reserve, the European Central Bank, the Bank of Japan, and the People's Bank of China jointly promoted a $1 trillion increase in the money supply. This is the 10th consecutive month of growth.

According to data compiled by Woofun AI, the year-on-year growth rate of M2 in US dollars was about 8%, while when calculated at a fixed exchange rate, it was only 4.5%. This growth rate is only one-third of the peak level in 2021. The weak trend of the US dollar is the core variable that causes statistical differences. Disassembling the performance of various economies, the US M2 reached a record high of 23.34 trillion US dollars, up 5.7% year on year; China's M2 grew 7.5%; Eurozone M3 grew 3.5%; and Japan's M2 declined slightly.

It is worth noting that the Federal Reserve's balance sheet has grown by only 141 billion US dollars in the past year, and there has been no large-scale monetary expansion. This indicates that the increase in global liquidity is mainly due to the operation of other central banks rather than the direct release of water from the US dollar system.

Historical laws show that the Bitcoin price is more sensitive to the M2 growth rate rather than the absolute total. During price peaks in 2017, 2021, and 2025, M2 was in a high growth phase; negative growth at the end of 2022 accurately corresponded to market cycle lows. Macro analyst Lin Alden's 2024 study indicated that during the 12-month observation period, Bitcoin's price trend matched the global M2 trend by 83%, far surpassing other assets.

However, since the end of 2025, M2 growth has clearly slowed, which explains Bitcoin's recent weakness more than the record total money supply. Currently, Bitcoin is trading at around $84,650, and the 24-hour increase is only 0.7%, showing a strong reaction from the market to the slowdown.

Actual repressive factors have further exacerbated the plight of risky assets. On September 16, the Federal Reserve raised interest rates to the 3.75% to 4% range, the first rate hike since 2023. With oil prices approaching $100, the CPI inflation rate remained at 3.4% in August. According to TheStreet data, the 10-year US Treasury yield rose to 5.225%, the highest level since 2007, and the high yield significantly raised the valuation threshold for non-yielding assets. The price of gold fell to $4,163, down nearly 26% from its January peak. In contrast, the S&P 500 closed at 7,743 points, driven by a favorable technology sector, with a relatively steady performance. The key variable for the future market is whether M2 growth will accelerate again before interest rates begin to fall.