tl;dr
A financial analyst known as TXMCtrades criticized the use of global M2 money supply data to predict Bitcoin price movements, calling such analyses mathematically unsound and misleading. He argued that inconsistent update frequencies across countries distort the data, causing it to reflect foreign e...
A financial analyst known as TXMCtrades has sharply criticized the use of global M2 money supply data to predict Bitcoin price movements, labeling such analyses as mathematically flawed and misleading. He highlights that inconsistent update frequencies across countries distort the data, making it reflect foreign exchange fluctuations rather than true money supply trends.
China, representing 46% of global M2, is reportedly the only major economy with M2 levels above its post-COVID peak, whereas US M2 remains below its 2022 peak and is growing at its slowest rate since Bitcoin’s inception (excluding 2022-2024). This disparity challenges the reliability of global M2 as a predictor for Bitcoin price trends.
TXMCtrades criticizes attempts by analysts like Raoul Pal, Colin Talks Crypto, and others, who apply arbitrary lag times—ranging from about 10.7 to 15.4 weeks—to correlate global M2 changes with Bitcoin prices. The analyst argues these are overfitted models lacking sound foundations, emphasizing that money supply changes don’t inherently have a “wait time.”
Moreover, he points out major flaws in generating daily or weekly global M2 time series data due to many countries updating their figures monthly and some not having updated beyond February. As a result, the data often reflects an M2-weighted inverse dollar exchange rate rather than meaningful economic signals.
TXMCtrades calls for higher rigor and mathematical precision in cryptocurrency financial analysis, urging the community to reject “scammy” and superficial studies in favor of more robust forecasting methods. His critique serves as a caution against relying too heavily on headline macroeconomic indicators like global M2 without deeper scrutiny.