Cryptocurrencies Rally as U.S. M2 Money Supply Tops $23trn
The total cryptocurrencies market capitalisation increased by 1.77% to $2.278 trillion amid a sharp increase in the money supply in the United States.
Bitcoin saw a 24-hour gain of 1.48%, trading at $62,900, while Ethereum rose 3.47%, according to trading data obtained from global cryptocurrency exchanges.
Top digital assets have staged an uptrend as optimistic investors increase their bets on performing crypto assets, with a rise in the US money supply boosting liquidity.
Most market sectors posted gains, except for the AI sector, which remained flat.
The U.S. M2 money supply, a broad measure of currency in circulation and deposits, has surpassed $23 trillion for the first time, marking a new all-time high.
M2, the Federal Reserve’s broad measure of dollars circulating through the economy, climbed to $23.052 trillion in May. That’s according to the Fed’s H.6 Money Stock Measures release published on June 23, and it marks a $247.8 billion jump from April’s $22.8045 trillion.
The year-over-year growth rate hit 5.6% in May, marking the fastest expansion since July 2022. Analysts said this continued expansion of liquidity is being closely watched by investors.
M2 has risen for five consecutive months since the start of the year, increasing cumulatively by approximately $623 billion from $22.43 trillion in January; the month-on-month increase alone was about $247.8 billion, signalling continued liquidity expansion
From an investment perspective, an increasing money supply can lead to concerns about long-term currency debasement and inflation. This macro trend reinforces the narrative for scarce assets like Bitcoin, which some investors use as a hedge against monetary expansion.
The growth in M2 could provide a significant tailwind for risk assets, including crypto, if capital seeks alternatives to a potentially depreciating dollar. Cardano Price Rises 5% as RealFi Testnet Launch Drives Optimism
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