BTC's ability to outpace money supply growth is fading

Bitcoin's trend of outpacing the growth of the U.S. M2 money supply has begun to falter, suggesting the current stock market rally may not be as robust as it appears, CoinDesk reported. The outlet noted that BTC has halved from its $126,000 price in October 2025, and its ratio to M2 has formed what appears to be a bearish head-and-shoulders pattern. This weakening momentum suggests Bitcoin's ability to generate excess returns by overwhelming new dollar liquidity could diminish for some time. CoinDesk also pointed out that while the S&P 500 is near all-time highs, when adjusted for M2 growth, it has only recovered to its 2000 dot-com bubble peak. The analysis concludes that if Bitcoin, the risk asset most sensitive to liquidity, can no longer outperform money supply expansion, the stock market's rally may have a weaker foundation than it seems.