Money-supply-adjusted valuations reveal both bitcoin and the S&P 500 remain below historical peaks despite nominal highs.
Adjusting BTC and the S&P 500 for U.S. M2 money supply growth exposes weaker underlying trends than nominal prices suggest. The S&P 500, on this basis, has only recently matched its dot-com-era peak, while BTC at $66,000 reflects a sharper decline from its $126,000 high last October.
M2, which tracks liquid assets including cash and short-term deposits, has expanded significantly, distorting nominal asset valuations. Observers note the BTC/M2 ratio, a gauge of bitcoin’s value relative to money supply, has signaled potential monetary exhaustion after a steep rise from 2023 to 2025.
Nominal prices mask these adjustments, with the S&P 500 near record levels and BTC’s drop attributed to cyclical crypto volatility. However, money-supply-adjusted metrics suggest deeper structural concerns for risk assets.