A comprehensive measure of U.S. currency circulation has risen to new highs, a signal of economic growth, sending a contradictory message to the path of Bitcoin
.
this M2 currency supplyData source Barchart.com said that deposits including relatively liquid coins and mutual fund deposits in banking and money markets rose to $21.9.4 trillion at the end of May and rose $21.72 trillion in March 2022. According to a 4.5% year-on-year growth rate in April, it is also the highest in nearly three years. Data source Yahoo Finance.
For cryptocurrencies, the information is messed up. Often, the growing money supply is seen as a looser financial position and a growing economic signal, which promotes the impact of more investors on riskier assets.
On the other hand, growth in the money supply may lead to inflation if it exceeds the economy Tiomarkets. The inflation problem may reduce investors’ risk and pressure the Fed to raise interest rates.
In recent years, rising M2 has had a lagging impact on the Fed’s preferred inflation measure (personal consumption expenditure) (PCE) inflation. The St. Louis Fed began soaring in February 2023, with M2 growth starting to soaring in February 2023 and lowering M2 growth in 2023, starting to rise in 2023. Blog Posts.
If history is a guide, the continued rise in M2 growth could lead to inflation in the coming months, which makes the Fed lower interest rates to 1%, which is more challenging Recently known as By President Donald Trump.
