In December 2024, the M2 money supply in the U.S. grew to $21.5 trillion, nearing its all-time high. CoinDesk senior analyst James Van Straten highlighted this trend.

M2 includes all cash and non-cash money in circulation and directly impacts inflation. The indicator has been rising every month since the beginning of the year.

“The continued increase in money supply is a bullish signal for risk assets, as it suggests more liquidity is entering the system, which typically flows into them first,” Van Straten noted.

He emphasized that M2 expanded despite the Federal Reserve’s tightening of quantitative easing while maintaining high interest rates. The Fed aims to reach its 2% inflation target, but December’s consumer price index still showed a 2.9% annual increase.

Meanwhile, stablecoin market capitalization hit a new record of $222.6 billion, according to CoinGecko. Many experts see this capital influx as a bullish sign for crypto.

Stablecoins act as fiat proxies in the digital asset market and are widely used for investments.

VanEck analysts predict that stablecoins will become a cornerstone of global trade, with daily transaction volumes reaching $300 billion by the end of 2025.