Willy Woo: Bitcoin Price Leads M2 to DXY Index More Suited to Assess Bitcoin Correlation

BlockBeats News, November 13th, Cryptocurrency analyst Willy Woo wrote that "the market does not follow the expansion of global M2 supply, but is speculative in nature. This means that the market will preemptively price in expected liquidity. Risk assets often lead M2. Therefore, at a global top, you will see the S&P Index peak ahead of time, while Bitcoin will also peak earlier. This is because Bitcoin can act as a liquidity perception mechanism."

Furthermore, M2 is a flawed metric because when you assess the total fiat supply in the system, you are measuring in dollars, but only about 17% is actually in dollars, with the rest in foreign currencies. So M2 actually reflects more the strength of the dollar. In fact, there is a more suitable metric, which is the DXY (Dollar Index), which is much more reliable when evaluating the correlation with Bitcoin."