Mike McGlone, senior commodity strategist at Bloomberg Intelligence, shared his views on Bitcoin (BTC) and its relationship with the Nasdaq 100 Stock Index on Twitter. The analyst suggested that Bitcoin may face a performance hurdle as the ratio of Bitcoin price to the Nasdaq 100 Stock Index nearly doubled on June 22.
McGlone explained that Bitcoin hit a new high in 2021 with its biggest liquidity pump ever against the stock indicator, but the effects of the money supply reduction phase may be more permanent. He cited the US M2 money supply as about minus 5%, the lowest level in the database since 1960, as a sign of unfavorable liquidity conditions for risk assets.
This is the lowest level McGlone has seen since 1960. He implies that this means there is less money for people and businesses to invest in risky assets like Bitcoin. M2 is a measure of the money supply that includes cash, check deposits, and other types of deposits that are easily convertible into cash.