Bitcoin price is trading 56% below its previous all-time high despite global M2 money supply reaching a record $135.1 trillion and the S&P 500 near all-time highs.
For years, the Bitcoin price has generally moved in the same direction as global liquidity and risk assets such as technology stocks. When the money supply expanded, Bitcoin often followed. When liquidity tightened, Bitcoin usually struggled. However, that relationship appears to be weakening over time.
While global money supply recently reached a record $135.1 trillion and the S&P 500 continues trading near all-time highs, Bitcoin remains 56%below its all-time high. BTC price is now trading around $66K
According to CryptoQuant author and Alphractal founder Joao Wedson, Bitcoin's correlation with traditional financial markets has weakened over the years.
Bitcoin's correlation with the iShares Expanded Tech-Software ETF, which historically showed a strong correlation with BTC price showed some weird signs. Until 2025, both assets moved in tandem as investors treated Bitcoin and technology stocks as growth assets.
That relationship has started to significantly weaken.
According to analyst Wedson, Bitcoin is no longer showing a strong connection with any major traditional market sector or stock. While tech stocks and major indexes continue moving higher, Bitcoin price has struggled to keep pace.
The same disconnect can be seen in global liquidity. Global M2, which tracks the amount of money circulating across major economies, recently hit a record $135.1 trillion.
Historically, more money in the financial system has helped push stocks, real estate, and assets like Bitcoin higher.
Since early 2023, Global M2 has grown from about $90 trillion to more than $135 trillion. During the same period, the S&P 500 jumped from around 4,000 to 7,400, gaining roughly 85%.
Bitcoin also moved higher and eventually reached a record high of nearly $126,000 in October 2025. The relationship changed after Bitcoin reached that peak.
BTC has fallen to around $64,200, leaving it roughly 56% below its all-time high. Meanwhile, global liquidity continues to rise, and stocks remain close to their highs.
That gap has become one of the biggest talking points among market analysts.
Some believe Bitcoin is simply lagging, while skeptics feel the days of Bitcoin are over. Similar gaps have appeared before, but in the previous cycles, Bitcoin price eventually caught up as money flowed back into cryptocurrencies.
According to Wedson, market participants have taken two sides.
The first group believes Bitcoin is simply falling behind, probably even losing it essence of store of value.
The second group believes the market has changed. Today, Bitcoin is held by more institutions, ETFs, corporations, and large investors than ever before.
As a result, Bitcoin may no longer react to liquidity conditions the same way it did in the past.
Despite Bitcoin's recent weakness, there are signs that institutional demand may be returning.
After several weeks of outflows, which saw nearly $5.5 billion outflow, spot Bitcoin ETFs recently recorded inflows of $86 million. Meanwhile, BlackRock's IBIT led the inflow with roughly $57 million.
Meanwhile, Strategy continues buying Bitcoin and now holds more than 846,000 BTC, making it the largest corporate holder of the asset.
Meanwhile, companies such as Strategy continue accumulating BTC. Blockinsider recently reported that Michael Saylor's firm increased its holdings to more than 846,842 Bitcoin, making it the largest corporate holder of the asset.
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