US M2 breaks $23 trillion for the first time! Market suspects Fed is restarting money printing, Bitcoin's anti-devaluation narrative heats up

The latest H.6 money stock report from the Federal Reserve shows that M2 broke through $23 trillion for the first time in May, increasing by $247.8 billion in a single month, with a year-over-year growth rate of 5.6%, the fastest pace since July 2022.
(Previous summary: The Federal Reserve launched a monthly purchase of $40 billion in Treasury bonds via RMP, is it different from quantitative easing (QE)?)
(Background supplement: US non-farm payrolls increased by only 57k in June, far below expectations! The previous value was revised down by 74k, and the Fed's rate hike expectations plummeted)

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• Mises Institute Warns: The Fed is "Secretly Turning on the Printing Press"
• Bitcoin's Anti-Depreciation Narrative Gains Attention Again
• Bitcoin's Trend Decouples from M2, "Liquidity Rally" Thesis Diverges

The latest H.6 money stock report from the U.S. Federal Reserve shows that M2, the broadest measure of U.S. money supply, formally broke through the $23 trillion mark in May, reaching $23.05 trillion, a record high. As this milestone figure emerges, criticism of the Federal Reserve is also intensifying, accusing the central bank of "quietly restarting" quantitative easing (QE) and injecting funds back into the market.

According to FRED data, M2 stood at $22.80 trillion in April and surged by $247.8 billion in May. Looking at a longer timeline, M2 has risen from $22.43 trillion in January this year, expanding by approximately $623 billion in just four months, an increase nearly approaching the annual economic output of a medium-sized European country.

M2 includes cash, checkable deposits, savings deposits, and retail money market funds, and is the most commonly referenced broad money supply indicator in the market. This data has risen for five consecutive months so far this year, with a year-over-year growth rate reaching 5.6%, the fastest since July 2022.

Mises Institute Warns: The Fed is "Secretly Turning on the Printing Press"

The Mises Institute, an Austrian school think tank that has long criticized the Federal Reserve, wrote in a report that the growth rate of the money supply since 2026 has reached multi-year highs, directly pointing out that the Fed is "quietly restarting QE," i.e., injecting liquidity into the market by expanding its balance sheet and purchasing securities.

The Federal Reserve itself did not attach any comments when releasing the data, while mainstream economists offered a different interpretation: M2 experienced a historically rare contraction period from 2022 to 2023, with the severity of the decline traceable back to the Great Depression era. The current growth is largely just a "return to the long-term trend," rather than a simple stimulus policy.

In other words, the speed of the increase in numbers is the real focus of hard-asset advocates, not the growth itself.

Bitcoin's Anti-Depreciation Narrative Gains Attention Again

For Bitcoin investors, hearing that M2 has exceeded $23 trillion might seem like good news, as its core investment narrative of "hedging against currency depreciation" is revisited every time the money supply hits a new high. Many analysts believe that Bitcoin's past bull and bear cycles have been correlated with the expansion of global liquidity.

On the other hand, the behavior of central banks themselves also reveals a "depreciation hedging" mentality. Data from the World Gold Council (WGC) shows that official institutions net purchased 41 tons of gold in May, continuing the average annual buying pace of about 1,000 tons over the past four years, and up to 45% of reserve managers plan to increase their gold holdings further, a record high.

Nigel Green, CEO of Devere Group, pointed out that the recent rally in gold has once again shaken market confidence in the Fed's next moves. The strong gold price reflects growing concerns about the stability of fiat currencies.

Bitcoin's Trend Decouples from M2, "Liquidity Rally" Thesis Diverges

However, equating money supply growth directly to a bullish catalyst for Bitcoin is not without disagreement in the market.

Since the beginning of this year, the combined M2 of major central banks (US, Europe, China, Japan) has reached approximately $101.7 trillion as of early July, but Bitcoin's year-over-year growth rate has turned negative this year, clearly decoupling from the global M2 growth rate. This has led some analysts to question whether the thesis that "liquidity drives Bitcoin" still holds, with the market showing significant divergence on this issue.