BTC Lags Behind Global Money Growth

Gold breaks records, global liquidity explodes, but bitcoin lags behind. This divergence raises questions : why does the flagship crypto asset, supposed to protect against monetary dilution, not react ? A Bitwise report reveals an unprecedented valuation gap between BTC and money supply growth. Market error or major opportunity ? The lines could move, and faster than we think.

Bitcoin facing a historic undervaluation according to Bitwise

In its latest macroeconomic report dedicated to bitcoin, the asset manager Bitwise reveals a major undervaluation of the asset compared to the global monetary environment.

“Bitcoin underperforms the global money supply by 66%, implying a fair value close to 270,000 dollars”, explains the report, based on a cointegration model between BTC and the global monetary aggregate M2, currently estimated at 137 trillion dollars. This gap would mark one of the largest discrepancies ever observed between the price of BTC and macroeconomic fundamentals.

Bitwise puts this situation into perspective with a series of cyclical signals which, according to the report, strengthen the thesis of a largely undervalued BTC. Here are the key elements :

• 66 % undervaluation of BTC relative to global money supply growth, according to their model ;
• Estimated fair value : $270,000, against a current market price well below $100,000 ;
• Expanding global liquidity : more than 320 rate cuts worldwide in two years ;
• The end of the U.S. Federal Reserve’s quantitative tightening (QT) program on December 1st ;
• A $110 billion stimulus in Japan, a resumption of quantitative easing in Canada, and a $1.4 trillion budget plan in China.

According to Bitwise, the absence of a Bitcoin market reaction to these factors reflects a rarely seen asymmetric opportunity in the recent history of the asset. The current gap between its price and its theoretical liquidity anchor would represent an upside potential of +194 %, if bitcoin realigns with the implicit levels derived from money supply.

“BTC is historically the most sensitive barometer to monetary dilution due to its absolute scarcity,” the report reminds.

When gold captures flows

From a complementary perspective, some analysts note that gold has absorbed most of the flows related to fears of monetary dilution this year, to the detriment of bitcoin.

According to Jurrien Timmer, Global Macro Director at Fidelity, “the current Bitcoin trend configuration is lagging behind gold, both in terms of momentum and Sharpe ratio, placing the two assets at opposite extremes.”

This last indicator, which measures risk-adjusted return, clearly shows gold’s outperformance over bitcoin in this monetary cycle phase. Timmer does not talk about an imminent reversal, but about a possible mean reversion configuration, implying this divergence could reverse.

Despite this relative underperformance, Timmer remains cautious about the long-term outlook. He says bitcoin “remains broadly aligned with its long-term adoption curve based on a power law,” while noting that its returns become less explosive as the asset matures.

He even compares it to “an early younger brother of gold, in a maturity phase.” This metaphor illustrates the current perception : an asset that retains its fundamentals but whose market cycles are more complex, less impulsive, and perhaps more institutionalized.

Grayscale predicts peaks for bitcoin as early as 2026 . It remains to be seen whether the market will confirm this scenario or extend this wait-and-see cycle. Between perceived undervaluation and persistent uncertainty, BTC remains at a crossroads.