More Money Is Entering the Financial System, with a Good Portion Flowing into the Crypto Market

As explained by an analyst, four factors are driving this trend: rising global money supply, record-breaking stablecoin growth, altcoin strength and regulatory clarity.

Key economic signals are showing that more money is entering the financial system, with a good portion flowing into the crypto market, explained an analyst.

Four factors are driving this trend: rising global money supply, record-breaking stablecoin growth, altcoin strength despite recent market volatility, and regulatory clarity in the U.S.

Global M2 Money Supply Is Expanding

First, the global M2 money supply, which includes cash, checking accounts, and liquid short-term investments, is expanding. When M2 goes up, it means more money is available for spending and investing.

Historically, crypto prices have often reacted positively to M2 growth, typically after a lag of about 70 to 77 days.

Bitcoin with an 11 week lag compared to the global M2 money supply seems to be a fairly accurate correlation.

This liquidity boost comes even as the crypto market faced recent volatility. Two major selloffs wiped out over $1 billion in value. But despite these swings, some altcoins are holding steady or gaining strength.

One standout example is Sui (SUI). Sui’s DeFi sector recently crossed $1.5 billion in total value locked (TVL).

Sui’s liquidity platform, DeepBook, is active, developers are building more tools, and interest is growing across the network.

Stablecoins Hit Record Highs

The second major driver is stablecoins. Stablecoin supply reached $231 billion—its highest level ever. These coins, such as USDT and USDC, are often used as ‘dry powder’ to buy other crypto assets, meaning more buying power sits ready in the market.

And stablecoin use is spreading to newer blockchain networks. Chains like Base, Solana, and Sui handled over $8 billion in stablecoin volume just in the past 30 days, showcasing the expanding adoption of these coins beyond the main platforms.

Finally, new regulations in the U.S. are starting to take effect.

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