🔥 Bitcoin vs Money Supply: Massive Move On The Horizon?

16 ก.ค. 2023

M1 Money Supply (M1SL): "M1 is the money supply that is composed of currency, demand deposits, other liquid deposits—which includes savings deposits. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash." - Investopedia

The M1SL amount is important since it tracks the amount of money in an economy that is able to be deployed quickly into the economy. If people have more to spend, they will generally spend more as a result of this.

When we take a look at the $ value of BTC divided by M1SL, the chart has been trading relatively flat since December of 2017. This means that Bitcoin has not gained substantially against the central banks' money printers.

On the other hand, it appears that BTC/M1 has been forming an inverse Head & Shoulders pattern over the last 5.5 years. Assuming this pattern will play out, BTC will continue to gain against M1 and break out of this 5.5 year consolidation pattern. Assuming that M1 will continue to increase (like it always does), this would mean that BTC will see another 2016-2017 scenario in the future where it will see exponential returns and potentially even do a 100x over the next few years.

This scenario is not the most likely scenario to play out, but it's definitely an interesting one. Hope to hear your thoughts in the comments 🙏