⚡Bitcoin and its M2: A look at it⚡
📊 The #M2 is a measure of the money supply that includes not only cash and demand deposits (as in #M1), but also time deposits, money market funds, and other types of short-term deposits. In the context of the#Bitcoinmarket, M2 can refer to the total amount of money that is available to invest in the market.
✍🏻 In simpler terms, it represents the total liquidity that investors can use to buy #Bitcoin. This is important because a higher #M2 can indicate more money available to invest, which can potentially influence asset prices. Let's take a look at it:
🔹Available Liquidity: When the money supply increases, there is more money available in the economy. This can lead to more investors having additional funds to invest in assets like Bitcoin, which can increase demand and therefore the price.
🔹Inflation and the Value of Money: An increase in the money supply can lead to higher inflation, which reduces the value of fiat money. Thus, investors may seek refuge in assets that they consider safer or with a limited supply, such as Bitcoin.
🔹Monetary Policy: Decisions by central banks such as money printing or interest rates can play a role, such as expansionary policies that can cause investors to look for alternative assets such as #Bitcoin to protect themselves against the devaluation of fiat money.
🔹Market Expectations: If investors anticipate that the supply will continue to increase, they may choose to invest in Bitcoin in anticipation that its value will increase compared to fiat money.
🌐 These factors may make it seen as an attractive store of value in times of economic uncertainty. If #Bitcoin continues to follow the trajectory of the global#M2money supply, it is highly likely that we will see a new all-time high by the end of this year.
