Global Money Supply Is Increasing, Supporting Bitcoin Price
October 31, 2025
Across the world, major central banks have been circulating more money than ever. As the economy seems to fall on harder times, central banks have gone back to their time-worn decision to cut rates, and provide more liquidity into the system. The response to every problem comes in the form of increasing the money supply and getting more money circulating into the economy – from a bank crisis to a pandemic.
Bitcoin was created as a result of the bailouts that marked the response to the global financial recession. We know this was very much on the creator, Satoshi’s mind, due to the Genesis Block – which alluded to the British government providing more bailout funds to banks.
Now in 2025, that instinct for central banks to increase money supply at the first hint of trouble hasn’t changed much – and major central banks continue increasing money supply.
The liquidity burst is a bullish support factor for Bitcoin, which tends to increase in price a correlated fashion with global money supply going up, albeit on a lag. So far, since January 2025, global money supply is up as measured in M2 by about 8%. While the last three-month period has been below-average when compared to historical periods of money supply growth, money supply grew in Japan, the Eurozone, the United States, and China.
While there seems to be a temporary pause as of September 2025, the long-term trend is towards more global money supply, after a period of retrenchment due to inflation and the outbreak of the invasion of Ukraine by Russia in 2022.
In the United States, the Federal Reserve has been pressured to cut rates and unwind quantitative tightening put in place to try to combat a surge of inflation in 2022. Even though inflation is above the 2% baseline the Federal Reserve is aiming for, the market is still expecting further rate cuts and increased money supply because of this paradigm.
In the last year, since October 2024, the M2 monetary measure has increased by about 5%. Importantly, it is now past a high in April 2022, before the Federal Reserve tightened money supply in response to a wave of inflation. Though there was a temporary period of less money being circulated after an extreme ramp-up during COVID-19 (where the money supply grew faster even than the response to the Great Financial Crisis of 2008), that seems to have ended this year.
China is being buffetted by a wave of deflation, and concerning unemployment, including a potentially politically volatile situation with GenZ youth unemployment amid notable incidents of young people overthrowing their government as in Nepal and Bangladesh. There’s a lot of continued support for liquidity going up. M2 growth in China has been about 8.5% from August 2024 to August 2025.
Europe is also still suffering from economic stagnation, with anemic rates of growth. The European Central Bank has been increasing money supply as a result, following a similar trend to the Federal Reserve after a period of tightening, with the M2 base increasing year-over-year as of 2024.
Yet Bitcoin’s price seems to be dropping in recent days – with momentum going away from an all-time high above $124,000 around mid-August. Looking beyond the headlines though, you still see the fundamental trend of Bitcoin’s price being correlated with liquidity in the market – with some of the fall being attributed to the fact that the market had been pricing further interest rate cuts that Fed Chairman Jerome Powell flatly said shouldn’t be counted on.
As governments continue to embrace fiscal spending, central banks have defaulted to going back to loosening monetary policy in order to respond to any signs of trouble – an instinct honed throughout the Great Financial Crisis, the Eurozone Crisis, and the COVID-19 pandemic.
A quick study of the world’s largest economies shows that this trend will likely continue – so even though there might be short-term volatility inherent in Bitcoin price, the long-term trend continues to be supportive of new highs when Bitcoin is priced in money that can’t seem to find its way to controlling itself.
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