Adjusting asset prices for M2 money supply growth — a method that strips out the inflationary effect of central bank money printing — reveals a less optimistic picture for both bitcoin and the S&P 500 than nominal price charts suggest. When valuations are measured against the expanding monetary base rather than in raw dollar terms, gains that appear significant in traditional charts are considerably diminished or even reversed. This approach argues that much of the apparent appreciation in risk assets over recent years reflects currency debasement rather than genuine wealth creation. Analysts tracking M2-adjusted performance warn this metric points to concerning trends ahead, particularly as central banks continue expanding money supply, potentially masking underlying weaknesses in both crypto and equity markets.
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