Money-Supply Adjustment Exposes Weakness in Bitcoin and S&P 500 Gains

The Federal Reserve’s M2 measure covers currency in circulation, checking and savings deposits, money market funds and time deposits, and serves as a gauge of U.S. dollar liquidity. Dividing asset prices by M2 strips out nominal gains caused by money-supply expansion. This shows whether bitcoin and U.S. stocks have genuinely increased purchasing power and helps assess the foundations of the rally in risk assets.

CoinDesk reported on June 17, 2026, that bitcoin had fallen by nearly half from its October 2025 peak of $126,000 to $66,000, while the BTC/M2 ratio had formed a bearish head-and-shoulders pattern. Although the S&P 500 was near 7,511, far above roughly 1,500 in 2000, its M2-adjusted level had only recently returned to its dot-com-bubble peak. This suggests that monetary expansion drove much of the nominal increase over roughly 25 years.