Bitcoin News Today: Bitcoin's Bull Case Gains Steam as U.S. Money Supply Hits Record $22.1 Trillion

The U.S. M2 money supply reached a record $22.1 trillion in July 2025, marking a new all-time high and reinforcing a bullish outlook for the cryptocurrency market. The expansion in M2 reflects broader liquidity in the financial system, encompassing cash, checking accounts, and savings deposits. Year-over-year growth stood at 4.79%, a significant acceleration from 1.54% in July 2024. Month-to-month, the M2 supply increased by 0.33%, signaling continued expansion despite economic uncertainties elsewhere in the economy [2].

The increase in M2 has drawn attention from analysts and market observers, particularly within the crypto community. Many view the growth in money supply as a positive signal for digital assets, especially Bitcoin . The rise in liquidity is seen as a potential driver of investment in alternative assets that offer inflationary hedges. Crypto market commentator Crypto Rover emphasized this perspective, tweeting that the M2 milestone was “bullish for Bitcoin & crypto” and noting the link between monetary expansion and increased interest in risk assets [2].

Despite the growth in M2, the Rothbard-Salerno True Money Supply (TMS)—which focuses on more liquid components of the money supply—has remained largely flat since January 2025, reaching $19.3 trillion in July. This growing divergence between M2 and TMS is being closely analyzed by economists, as it suggests a structural shift in how money is being created and circulated within the financial system. The gap highlights the importance of broader monetary aggregates in gauging liquidity trends [2].

In parallel, broader economic indicators have shown signs of weakening. Employment growth has slowed, with revised July figures pointing to weaker labor conditions than previously reported. This trend has coincided with declining home sales and rising delinquencies on major loan categories, including student loans, auto loans, and credit cards. These conditions resemble patterns seen during the Great Recession, raising concerns about the overall health of the consumer and credit sectors [2].

Rising default rates and an 11% year-over-year increase in bankruptcy filings have contributed to tighter lending conditions, which, in turn, may slow the rate of money supply growth. Loan activity is a critical component of M2 expansion, and as fewer individuals and businesses qualify for new credit, the pace of monetary expansion may moderate. Analysts suggest that this dynamic could influence future M2 trends, but for now, the current trajectory remains upward.

The crypto market outlook remains optimistic in the context of these developments. With more than $5 trillion added to M2 since the beginning of 2020, digital asset investors are increasingly positioning themselves for long-term growth. As traditional monetary metrics continue to expand, crypto advocates argue that demand for decentralized, inflation-resistant assets will follow. This perspective is supported by ongoing market movements and the broader search for alternative investments amid rising economic uncertainty [2].