Record Money Supply Boosts Gold, Leaves Bitcoin Behind
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James Mitchell combines investment banking with cryptocurrency journalism to analyze the institutional adoption of digital assets. Specializing in ETFs and regulation, he translates complex developments…
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The global money supply reached unprecedented levels in December 2025, marking a significant milestone that has historically benefited asset classes perceived as hard investments.
As a result, gold has experienced considerable price gains, continuing its upward trend despite occasional brief setbacks. In stark contrast, Bitcoin, which has often been likened to ‘digital gold’, has faced more volatile price movements.
The latest data highlights that global liquidity has surged, with the total broad money supply climbing to a staggering $144 trillion. This represents a year-over-year increase of $13.6 trillion, or 10.4%, according to insights from the Kobeissi Letter. This figure has now shown a consistent upward trend for three consecutive months.
Notably, since the onset of the pandemic in 2020, the money supply has escalated by $44 trillion, equating to a 44% increase. This rapid expansion is unprecedented outside a crisis setting. Observations made by Jurrien Timmer, director of global macro at Fidelity, suggest that while gold has aligned with historical expectations of robust performance in response to increased liquidity, Bitcoin has not followed suit.
Despite fluctuations, including a significant 21% downturn earlier this month, gold has demonstrated resilience. Timmer pointed out that the precious metal has exhibited typical behaviors of a bull market, enduring sharp but short-lived declines that quickly attract renewed investment.
He further noted that while gold has consistently mirrored the trends in the global money supply, Bitcoin’s price trajectory has been markedly less stable, fluctuating more dramatically than gold. This inconsistency complicates its role as a parallel hard asset.
Timmer elaborated on the contrast between gold and Bitcoin, stating that the latter deals with a dual identity: it is viewed both as a potential stable currency and as a speculative asset. This duality complicates its market behavior.
According to him, incorporating volatility data from software and SaaS indices relative to the growth of the money supply clarifies that negative sentiment towards speculation in the market can easily overshadow liquidity gains that would typically support Bitcoin’s price.
Historically, conditions of rising liquidity and high speculative interest have fueled significant bull markets. Conversely, the current environment showcases ample liquidity growth alongside a bear market in speculative interest, resulting in Bitcoin stagnating while gold thrives.
The present disparity between gold and Bitcoin’s performance stresses that an increase in liquidity does not automatically translate to positive outcomes for cryptocurrencies, especially when appetite for risk diminishes. The future alignment of Bitcoin with global liquidity trends may hinge upon a resurgence of speculative interest in the crypto space, an outcome that remains to be seen as February 2026 comes to an end.
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