Global Money Supply Growth Cools Even as $120tn Threshold Holds, Clouding Crypto Outlook

Global money supply has slipped for the first time in several weeks, complicating the widely cited thesis that bitcoin tracks broad liquidity growth with a lag. Figures compiled by BizioMetrics put global M2 at $120.3356 trillion as of 6 July, a decline of roughly 0.06% from $120.4070 trillion seven days earlier, according to TokenPost.

The headline drop is small, but the underlying momentum matters more to macro-focused desks than the absolute level. The seven-week M2 growth rate turned negative at -0.27%, a sharp reversal from 0.72% the previous week, signalling that the short-term liquidity impulse that has often preceded crypto rallies has weakened materially.

Annual expansion still broadening

Year-on-year, the picture looks firmer rather than weaker. Global M2 growth on an annual basis was measured at 6.27%, up 1.44 percentage points from 4.83% a week earlier, indicating that the medium-term expansion of world money supply has continued to broaden even as the weekly impulse has cooled.

For institutional allocators who treat bitcoin as a liquidity barometer, that divergence is the crux of the story. Analysts have long pointed to an estimated ten-week lag between shifts in global M2 and bitcoin price behaviour, meaning a softening short-term impulse could dampen near-term tailwinds for risk assets even as the stronger annual trend supports a more constructive medium-term liquidity narrative.

On-chain gauges point to a neutral market

On-chain valuation metrics remain within familiar bounds. Bitcoin’s MVRV Z-score, which compares market capitalisation with realised value, rose to 0.36 from 0.23 the previous week, an uptick that still sits comfortably inside the 0–2 range typically read as neither overheated nor undervalued.

Holder behaviour has also stayed largely unchanged. The share of bitcoin supply that has not moved for at least a year — the 1+ Year HODL Wave — edged up marginally to 61.93% from 61.90%. With more than 60% of supply effectively dormant, market participants generally interpret the reading as continued structural supply lock-up, a condition that can amplify price movements once fresh demand materialises.

ETF flows offer a tentative demand signal

That fresh demand may already be re-emerging through regulated fund flows. Data from SosoValue, cited by TokenPost, showed US spot bitcoin ETFs recorded net daily inflows of $265.69 million as of 6 July US Eastern Time, marking two consecutive trading days of inflows, while US spot ether ETFs posted net inflows of $20.66 million, extending their streak to three days.

Taken together, the picture facing traders and policymakers is deliberately mixed: a cooling short-term liquidity impulse offset by firmer annual money-supply growth, valuation metrics sitting in neutral territory, steady long-term holding patterns, and an early but measurable revival of institutional demand via regulated ETF products. Whether that ETF-driven demand proves durable may determine how crypto markets fare if global liquidity growth remains subdued over the coming weeks.

Read more: Wintermute Warns Bitcoin’s Rebound Is a Relief Rally, Not a Regime Change