Bitcoin is trading at a deep discount to global liquidity trends, even as macro headwinds related to energy prices and monetary policy complicate the outlook for risk assets and economic growth, according to new analysis from CF Benchmarks.
Global M2 money supply has increased by about 12% since mid-2025, while Bitcoin has fallen by about 35% over the same period, the Kraken-owned index provider said.
One of the models cited in reportThe article, published Thursday, suggests that Bitcoin’s “fair value” is around $136,000, compared to its current price of nearly $70,000.
The divergence marks one of the largest gaps on record between Bitcoin and the index that analysts have long viewed as a proxy for global liquidity. Historically, money supply expansion has also permeated risk assets, with Bitcoin often reacting more sharply than stocks.
“The key takeaway from over 10 years of data is that historically the divergence between M2 and Bitcoin has been temporary,” said Gabe Selby, head of research at CF Benchmarks. decryption in a statement sent via email.
Analysts say the missing link is U.S. monetary policy. The Federal Reserve has reduced its balance sheet to approximately $6.7 trillion Interest rates remain high from a peak of nearly $9 trillion in 2022, and financial conditions are tight despite increased liquidity elsewhere.
This backdrop limits capital inflows into the market, making Bitcoin more closely tied to real interest rates and broader risk sentiment than money supply growth.
elephant in the room
At the same time, rising energy prices are putting pressure on household budgets.
economist The researchers estimate that an 81-cent increase in U.S. gas prices since late February could add about $740 a year to household budgets, potentially offsetting much of the boost from higher tax refunds.
at the White House in January projected Citing President Donald Trump’s Working Families Tax Cuts Act, he announced that tax refunds for Americans will increase by an average of $1,000 in the winter compared to previous cycles.
Markets are also focused on potential disruption to the Strait of Hormuz, a key artery for global oil supplies, and the associated inflation risks.
Rising interest rates and rising oil prices due to the continuing conflict between the United States and Iran have plagued markets in recent weeks, with oil prices exceeding $100 a barrel on Thursday before returning to more moderate levels around $92.
This combination risks discouraging discretionary spending and reducing the pool of funds available to invest in riskier assets such as cryptocurrencies and growth stocks if prices remain high.
Still, most experts argue that once financial conditions ease and the Middle East conflict is brought under control, global economic growth could pick up again, providing a major tailwind for cryptocurrencies.
According to CF Benchmark, past cycles suggest that Bitcoin tends to follow multi-quarter liquidity trends, especially if the Fed moves to cut interest rates or slows its pace of balance sheet reduction.
The question is when?
Inflation has continued to rise and wreaked havoc on the prices of goods and services since post-pandemic stimulus was implemented under the Biden administration, but the central bank has sought to lower benchmark interest rates to boost growth.
Currently, markets are grappling with persistent inflation, foreign wars, and monetary tightening, increasing uncertainty among participants about the direction of risk assets. And cryptocurrencies, which have been following the Nasdaq almost in unison, are still on par.
“The increased demand through the TradFi instruments that pushed Bitcoin to all-time highs, namely US-listed spot Bitcoin ETFs and corporate treasuries, will provide more direct mechanical support for a trend reversal,” Selby said.
“Continued purchases from these cohorts represent a source of structural demand that was not present in previous cycles,” he added.
