US money supply reached a record $23.34 trillion in August, according to Federal Reserve data, even as Bitcoin slipped this week. The divergence highlights a debate over whether liquidity growth still drives the largest cryptocurrency.
Money Supply Growth Accelerates
M2, the broad gauge of cash, deposits, and retail money funds tracked by the Federal Reserve, rose about $125 billion in August. It was up 5.7% from August 2025. The Kobeissi Letter, a markets newsletter, called that the fastest pace since May 2022.
Fed figures also show M2 rising about $988 billion from December to August, or $123 billion a month. The monetary base, which counts currency plus bank reserves at the Fed, fell about $112 billion in August. M1, which counts cash plus checking and savings deposits, supplied about $105 billion of the M2 gain.
The Fed is also watching the aggregate. Its first monetary policy report under Chair Kevin Warsh features money supply. “I think money, strangely enough, has something to do with monetary policy,” Warsh said in remarks at a Hoover Institution event last year.
Bitcoin’s Fixed Supply Narrative
Bitcoin’s supply caps at 21 million coins, a limit no central bank can change. Supporters pitch that scarcity as a counterweight to currency expansion.
Yet CoinGecko data show Bitcoin has lost ground over the past seven days. BTC is struggling to stay above $75,000.
What Is Holding Bitcoin Back?
21Shares, a crypto asset manager, said a volatility squeeze that built through October resolved to the downside. The firm links a November recovery partly to a return of spot Bitcoin exchange-traded fund (ETF) inflows.
Combined global money supply for the four biggest economies reached $103.66 trillion in August, also a record. Bitcoin lagged that rise as bond yields climbed.
BitMEX co-founder Arthur Hayes has told traders to go long Bitcoin. His case rests on an expected bailout, worth trillions, once the artificial intelligence (AI) data center boom ends.
The split tests whether money supply growth still drives Bitcoin or whether ETF flows and yields now matter more. A return of ETF inflows would help show which reading holds.
