On April 6, 2025, analysts reported a significant divergence in the global M2 money supply, which includes money market funds from major economies like the U.S., China, and the Eurozone. This trend coincided with Bitcoin’s recent consolidation, leading some experts to suggest that a potential appreciation of Bitcoin (BTC) could occur despite a bearish sentiment in the market.
- Global M2 money supply surged in 2025.
- Bitcoin spot ETFs show recent weakness.
- Bearish sentiment affects Bitcoin market outlook.
- Realized Cap indicates potential bear market.
- Tether reserve growth has stalled recently.
- Rising global M2 suggests increased buying power.
The ongoing U.S.-China trade war has impacted investor confidence, particularly following China’s imposition of a 34% tariff on April 2. This has contributed to a decline in Bitcoin spot ETFs and a pessimistic outlook for the cryptocurrency market.
The global M2 money supply, which includes money market funds, has shown an unprecedented increase in 2025. This surge is occurring while Bitcoin remains in a consolidation phase. Historically, such divergences between money supply and Bitcoin price movements do not last long, suggesting that Bitcoin could appreciate in the near future. However, the recent trade tensions between the U.S. and China, particularly the 34% tariff imposed by China, have created a challenging environment for investors.
Recent data indicates that Bitcoin spot ETFs have experienced weak performance, with a notable decline in inflows for most products, except for Blackrock’s IBIT ETF, which saw some inflows recently. This trend reflects a bearish short-term sentiment among investors. Ki Young Ju, CEO of CryptoQuant, stated that the current market conditions resemble those of a bear market, indicating that the bull cycle for Bitcoin may be over.
Ju’s analysis of the Realized Cap versus Market Cap suggests that capital inflows are not translating into price gains, a sign of bearish conditions. He noted that a similar situation occurred after Bitcoin’s previous all-time high in December 2021. The current negative delta growth indicates that this bearish phase could persist for another six months, despite the rising global M2 money supply, which typically signals increased buying power.
While the data suggests a potential bear market, it is important to note that traditional cycle-top metrics have not yet reached overheated levels. This could mean that the market dynamics are different this time, and the situation warrants close monitoring as the year progresses.
In summary, while the global M2 money supply has increased, signaling potential buying power, the bearish sentiment in the Bitcoin market raises questions about the sustainability of its bull cycle. Investors are advised to remain vigilant as market conditions evolve.
