Printers Gonna Print: BTC and S&P 500 Look Shakier When You Subtract the Money Printer 🖨️

Adjusting the price of bitcoin and the S&P 500 for growth in the U.S. M2 money supply produces a weaker picture for both assets than their nominal levels suggest, with several analysts pointing to a possible loss of upside relative to the expanding dollar base. Bitcoin has nearly halved to $66,000 since its $126,000 peak in October of last year, a move that on the surface could be read as another brutal, quadrennial crypto bear market, while the S&P 500 continues to hover near record highs. Strip out the effect of M2 growth, however, and the picture changes.

M2 is the Federal Reserve's estimate of liquid assets, including cash on hand, money deposited in checking and savings accounts, and other short-term vehicles such as money market funds and certificates of deposit. Some observers treat bitcoin as a high-beta gauge of dollar liquidity, and the $BTC/M2 ratio — bitcoin's price adjusted for U.S. money supply growth — has attracted fresh attention. After a sharp climb from 2023 through 2025, the ratio has formed what technical analysts describe as a head-and-shoulders pattern, typically read as a bearish signal.

If that pattern holds, it would imply bitcoin's ability to outpace the flood of new dollars — the dynamic that helped it outrun debasement in prior cycles — is fading for now. The concern extends beyond crypto, since bitcoin has at times been viewed as a leading indicator for broader risk appetite. The S&P 500, which currently sits near a nominal record high of 7,511 points compared with its 2000 peak of around 1,500 points, tells a different story on a money-supply-adjusted basis. Adjusted for two decades of M2 expansion, the index has only recently reclaimed its dot-com-era high, a fact that, on its own, does not necessarily imply equities are as overextended as they were in 1999–2000, as corporate earnings today are generally viewed as stronger and more durable than during that earlier period.