Glassnode Researcher Debunks Bitcoin-Money Supply Myth: What You’re Getting Wrong

Think Bitcoin's price moves in lockstep with money supply? Think again.

New data from Glassnode shatters the long-held belief that BTC is a pure inflation hedge—turns out the correlation isn’t what crypto bros claimed. Here’s why the narrative needs a reboot.

The ‘Print Money, Pump Bitcoin’ Fallacy

Central banks went brrrr for years, but Bitcoin’s price action? More erratic than a Wall Street analyst’s earnings forecast. Glassnode’s latest research exposes the shaky math behind the money-supply dogma—turns out macro liquidity isn’t Bitcoin’s puppet master.

So What Actually Moves the Needle?

Hint: It’s not the Fed’s balance sheet. Adoption cycles, miner behavior, and good old-fashioned speculation are pulling the strings. But hey, why let nuance ruin a perfectly oversimplified trading thesis?

The Takeaway

Next time someone says ‘BTC = digital gold,’ ask them if gold’s volatility comes with a side of memecoins. The market’s maturing—time to ditch the bumper-sticker economics.

*‘Correlation isn’t causation,’ says the researcher. Meanwhile, crypto Twitter: ‘Print. More. Money.’*

No Structural Link Between Bitcoin & Money Supply Of Major Economies

In a new post on X, Glassnode senior researcher CryptoVizArt.₿ has talked about the Correlation between Bitcoin and the money supplies of the Group of Seven (G7) economies. The “Correlation” here refers to an indicator that measures how tightly together the prices of two given assets are moving.

When the value of this metric is positive, it means the price of one asset is reacting to movements in the other by moving in the same direction. The closer the indicator is to 1, the stronger the relationship.

On the other hand, the indicator being under the zero mark suggests a negative correlation exists between the prices. That is, they are moving in opposite directions. This behavior is the strongest at -1.

Now, here are the charts shared by the analyst that provide a few representations of the Correlation between bitcoin and the money supply of each G7 nation over a 90-day rolling window:

As is visible in the graphs, the Correlation between Bitcoin and the money supplies of seven of the world’s largest economies has swung wildly over the years. Often, periods of positive values of the metric are succeeded by a phase of negative or neutral levels, with there being no clear macroeconomic triggers behind the shifts.

“Bitcoin’s correlation with US M2 or other major economies’ money supplies demonstrates no consistent or predictive pattern,” notes the Glassnode researcher. A longer-term view through a 180-day rolling window also shows the same.

“Despite frequent claims of a stable linkage, the data suggest the relationship is largely stochastic rather than structural,” says CryptoVizArt. While Bitcoin is certainly not independent of the global economy, this pattern WOULD suggest that there is a mix of several other factors that also play a role in driving the coin.

In an earlier X post, the analyst shared the trend in the 180-day Correlation between Bitcoin and two traditional assets: Gold and S&P 500.

From the topmost chart, it’s visible that Gold and Bitcoin have seen their 180-day Correlation stand at a neutral level most recently, indicating that the two have pretty much been moving independently of each other. Meanwhile, the second graph shows a notable positive value for the metric between S&P 500 and BTC, implying the cryptocurrency has been moving in tandem with stocks to some degree.

BTC Price

Bitcoin crossed above $122,000 during the weekend, but it would appear the asset has kicked off Monday with a retrace as its price is back at $119,000.