πŸš€ Rising M2 money supply will turn crypto into a ‘supermassive black hole’ β€” Raoul Pal

The surge in M2 money supply could be the catalyst for another bull run in the crypto market, surpassing traditional financial markets, according to Raoul Pal, the CEO of Real Vision. Pal highlighted the correlation between the increasing fiat market supply and the beginning of a crypto bull run. He shared a graph that compared Bitcoin’s yearly performance against the global M2 money supply, showing the simultaneous rise of Bitcoin and global M2 supply. Historically, the crypto market has outperformed traditional financial markets when there is an increase in global M2 supply. Pal expressed his enthusiasm for this trend, stating that Bitcoin outperforms the NDX (stock market index) during this period, turning the crypto market into a “Super Massive Black Hole.” The M2 represents the total amount of money in circulation, including cash, savings accounts, checking accounts, and other short-term savings instruments. The next Bitcoin block reward halving is expected in April 2024, which decreases the market supply of BTC while demand continues to grow. However, the block reward halving is not the only factor influencing the market surge; macroeconomic factors also play a significant role. Over the past decade, Bitcoin’s price has experienced significant gains during periods of M2 growth, driven by reduced interest rates, quantitative easing, and fiscal stimulus. Conversely, during times of monetary tightening by central banks, the crypto market has struggled to gain momentum. The 2021 bull market aligned with a 6% or higher aggregate M2 growth at major central banks worldwide.