Oh, the joys of relying on M2 money supply data to predict Bitcoin‘s (BTC) wild ride. According to one outspoken financial analyst, doing so is not only mathematically unsound, but it’s downright misleading. And we’re talking about a prediction strategy that’s, well, a bit like trying to predict the weather by staring at your neighbor’s barometer.
The critique comes just as the global M2 money supply hits an all-time high. Naturally, some analysts are now predicting that Bitcoin will follow the same trajectory. You know, because that makes total sense. Right?
Can Global M2 Money Data Actually Predict Bitcoin’s Next Moon Landing?
The analyst in question, a guy who goes by the catchy name of TXMCtrades, recently shared his musings on X (you might remember it as Twitter, but that’s so 2023). He singled out a particular chart from macro investor Raoul Pal, which compares Bitcoin’s price to the global M2 money supply. Spoiler alert: TXMCtrades thinks it’s rubbish.
“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.
It is time, give or take a few days…”
— Raoul Pal (@RaoulGMI) April 16, 2025
TXMCtrades, however, isn’t impressed. He argues that charting the global M2 supply on a daily or weekly basis is a terrible idea. Why? Because the data itself is updated inconsistently. The U.S. only updates its M2 weekly, while other countries do it monthly. Naturally, this causes some, let’s call them “misleading” fluctuations, which obscure any meaningful trends.
“People, you can’t create a daily or weekly time series of ‘Global M2’ when the United States is only updating M2 on a weekly basis and all others are monthly!”
That’s right. Many countries have yet to update their numbers beyond February. So essentially, you’re looking at a data set that’s about as accurate as predicting the next fashion trend based on last year’s runway show. According to TXMCtrades, what you’re really seeing is the effect of foreign exchange fluctuations—aka the dollar’s rollercoaster ride—more than any real shifts in the global money supply.
“You’re looking at an M2 weighted inverse dollar exchange rate 95% of the time. Be better at math!”
It’s not just the U.S. and its data lagging behind that’s a problem. TXMCtrades raises a red flag about China’s numbers too. The Middle Kingdom is home to 46% of the world’s M2, and it’s the only major economy with a money supply that’s above its post-COVID peak in dollar terms. Spoiler: China’s not exactly handling its massive debt deflation crisis gracefully.
“They are currently trying to ease out of an ongoing multi-year debt deflation and doing a pretty shit job of it. Their M2 goes straight up,” TXMCtrades quipped.
Meanwhile, U.S. M2 is still below its 2022 peak, and it’s growing slower than a sloth on a lazy day. Excluding the 2022-2024 period, it’s growing at the slowest pace since Bitcoin was born—suggesting, hey, maybe inflation isn’t about to go haywire anytime soon.
TXMCtrades isn’t done yet. He believes the widespread use of “random offsets” to align global M2 with Bitcoin price movements is total hogwash. Raoul Pal, for instance, has suggested there’s a 12-week lag between global M2 and Bitcoin’s price. Some even say 15.4 weeks. But TXMCtrades doesn’t buy it.
“SOL has been following Global M2 Money Supply (+100 days) its last two legs up. If this continues, SOL is set to pump massively within the next 2 weeks,” analyst Curb predicted.
TXMCtrades doesn’t mince words. He believes these offsets are often arbitrarily applied and do nothing to reflect actual money supply dynamics or asset prices. According to him, “Money is money, it doesn’t have a wait time.” No waiting for your lunch order here—why should M2 behave any differently?
“Money is money, it doesn’t have a wait time,” he declared.
To sum up, TXMCtrades is calling for some serious improvements in the world of financial analysis. He’s urging analysts to drop their “scammy” predictions and start focusing on more mathematically sound methods to understand Bitcoin’s price movements—because, frankly, at this point, it’s a bit like trying to predict a cat’s next move. Good luck with that!
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2025-04-17 10:27