Global money supply has been expanding for months, but Bitcoin has moved in the opposite direction — a split that is forcing a reassessment of one of crypto’s most foundational assumptions.
Global M2 has climbed roughly 12% since mid-2025. Over that same period, Bitcoin has fallen approximately 35%. According to the report, CF Benchmarks puts Bitcoin’s implied fair value at $136,000 based on historical M2 correlations. The asset is currently trading near $70,000. That is a $66,000 gap — one of the largest dislocations ever recorded between Bitcoin and its monetary context.
Gabe Selby, Head of Research at CF Benchmarks, says these gaps close eventually. This one is not closing.
The breakdown comes down to transmission. The Federal Reserve has cut its balance sheet from nearly $9 trillion to $6.7 trillion. Elevated interest rates are offering investors a guaranteed return, which removes the incentive to hold a non-yielding asset like Bitcoin. Capital does not chase risk when bonds are paying. So it does not flow into crypto. Global liquidity expands, but the pipeline is blocked before it reaches the asset.
At the same time, miners are under direct pressure. Surging energy costs are compressing production margins, and miners cannot afford to hold the Bitcoin they produce. They sell to cover operational expenses — consistently, without pause. That creates a steady stream of supply into the order book. The market absorbs it, but the selling caps every rally before momentum can build.
Bitcoin is caught between two forces pulling in the same direction: no aggressive inflows because rates suppress risk appetite, and persistent outflows because mining costs never ease. The result is a ceiling on every bounce.
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ETF flows reflect the same fragility. US spot Bitcoin ETFs pulled in $1.16 billion across seven sessions. Then a single day erased the sentiment: $129 million in outflows on Wednesday alone, with price falling 4% immediately after.
Where Traders Are Watching
The immediate technical floor sits between $69,000 and $70,000. A break below that level opens the mid-$60,000s. A reclaim of $72,000, according to the report, would signal that the M2 lag is beginning to resolve — that monetary expansion is finally transmitting into price.
What Would Change the Picture
A Fed pivot would remove the primary blockage. Lower rates reduce the appeal of bonds, push capital back toward risk, and let global liquidity actually reach crypto markets. Until that happens — or until energy costs ease enough to stop forced miner selling — Bitcoin is operating as a real rates trade, not a money supply trade.
Every month that passes without a resolution, Bitcoin gets cheaper in real terms relative to expanding global money supply.
Selby’s view, as stated in the report, is that the dislocation will eventually close. The next directional signal will come from either a shift in Fed policy or a sustained move back above $72,000 that confirms liquidity is finally finding the asset.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial or investment advice.
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