Bitcoin: Accounting for the Money Supply

Hey everyone and thanks for jumping back Into the cryptiverse today we're going To talk about Bitcoin and we're going to Be looking at it through the lens of the Money supply or M2 if you guys like the Content make sure you subscribe to the Channel give the video a thumbs up and Also check out the sale on into the Crypto various premium at into the I'm sure many people Here are very aware of the price chart For Bitcoin we follow it on basically a Daily basis but something that we only Check in on every few months although Admittedly maybe we should do it more Frequently is the price of Bitcoin Divided by the money supply now this one Is not divided by M2 and I'm sure you Are are very aware of it but you might Wonder what's the point of of Investigating the price action of Bitcoin as a function of the money Supply And the reason is because there's an Argument to be made that risk assets Trend higher with time sometimes not From any fundamental reason because it's More valuable but just simply because There's more money in the system and and If if there's more money then people are Going to put those dollars somewhere and Where they're going to put them Generally speaking they're going to put Them into risk assets try to help

Protect against the debasement of the Fiat currency that's being printed so if You look at before we look at this as a Function of the minus client look at it With the the S P 500 Divided by M2 so this is the S P 500 Divided by M2 now again remember the s p Not divided by M2 looks like this right I mean is it not just Up and to the right okay now look at it When you divide by M2 It's not really up and to the right in The same way in fact The value the valuation that the stock Market the S P 500 is at the current Time is the same valuation that it was At in October of 2020 and in February of 2020 and in November of 2017 and in December of 2007 and June of 2002 and September of 1996. So to some degree you can understand why We might be interested in how Bitcoin Looks as a function of the money supply If you sort of look at the S P 500 would Would with the exception of this rally Over here during you know going into crash we've mostly been range Bound Except for these two brief deviations Right so Euphoria and the Financial crisis but we've really just Been sort of range bound here For a long time now again this is what Bitcoin looks like

What does it look like up and to the Right right so we like Um the chart to look when you're Interested in an asset for the long term Up and to the right but what happens if You divide it by M2 it looks like this Now it doesn't look nearly as bad as the S p divided by M2 right just going Sideways more or less since the the you Know the mid to late 1990s but one Interesting thing is if you look at Bitcoin divided by M2 and we actually Covered this back in July Um you know this is actually right where Bitcoin found support before it rallied Back on up in fact we have a video I Believe basically a day before this Rally started Um where a lot of people again were were Calling for 20K back over here in the Summer well it was possibility of course Um the argument that we put out back Then was like we've already already Retesting the prior all-time high right You know you don't have to go back to 20K to retest the prior all-time high When you account for the money supply we Were already there at 28k again when Accounting for you know M2 And so Um with this most recent rally I thought It would be it would be interesting to See kind of where we are and and you can See that Bitcoin as a function of M2 has

Sort of rallied on up Um and if you know you sort of draw this Trend line here just sort of across to Sort of get this top and to get these Bottoms you can also see there was some Hesitation on this level as well so in Order to get there We're just a bit further away from it But it does go to show you that you know Sometimes when you look at it only as a Function of of the price it can leave Out you know crucial crucial aspects Okay so again look at where we tested it Back in in July Bitcoin we came back Down to 28k and then blasted off it did Not come down to this high but again With respect to the money supply it did Go back to the S P 500 look at this look At where it has found support at this Level you know back in the end of Crash the end of bear Market in in 2002 and it also found Support at that same level In March of 2020. We got rejected here in December of 2021. They got rejected at the same level in February of 2020. so even though the S P 500 went up and to the right basically For you know a year and a half when you Account for M2 it basically just rallied Back to where it was before the Meltdown Occurred It it really does make you pause and

Think for a minute doesn't it I mean you Know we're so used to of course looking At things just denominated in US Dollars And not accounting for anything else but Again accounting for for M2 you can see That that there has been sort of this Range here of the S P 500 and when you Go look at Bitcoin We can see that we sort of broke out of This range For a little while Sort of broke out of this range for a Little while but We did still technically see some of These same valuations going all the way Back to to 2017 right you know it it Sort of reminds me you know we've sort Of talked before about gold and how it Hasn't really gone anywhere in in a long Time and and sometimes that happens with An asset class you know you we like we Did with Bitcoin not too long ago you Find yourself at a price that was at Like five years before and and Um you kind of find yourself in the same Boat as some of the some of the people Who were bullish on gold for the last 10 To 15 years and maybe that one's finally Going to break out but again measuring This as a function of the money supply Um might be a a more useful tool Um sort of think about One thing to consider with the s p Divided by M2 is that it rallied back up

To where it was in March 2020. so you Know by the end of 2021 it basically Just went back up to where it was in March of 2020 but with Bitcoin divided By M2 You can see that Um it hasn't even gone Down to that level right I mean so so Bitcoin is certainly outperformed Um you know A lot of these different asset classes As measured from sort of like right Before we saw this this catastrophic Sell-off again accounting for the money Supply but I would argue that that when You account for M2 this level that we're Coming into right now is going to be an Interesting level because this is this Is what previously provided resistance Back in 2017 Um and it also provided support right Here in 2021 and and some sort of Hesitation here back in sort of the Summer of 2022. so keep an eye on this Level on trading view you can just Divide it by Um uh you know the money supply M2 and You can follow along to see uh if Bitcoin can actually break out of this Range or if it or if we just spend more Time consolidating back down if you guys Like the content make sure you subscribe To the channel give the video a thumbs Up but again check out the sale on into

The careers premium at into the see you next time bye


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