Bitwise Asset Management’s latest Monthly Bitcoin Macro Investor report argues that Bitcoin is experiencing one of its largest valuation disconnects in years, with the asset lagging behind both global money supply growth and gold’s recent performance.
Global liquidity surge outpaces bitcoin
According to Bitwise, global liquidity is pivoting toward reflation, with major economies such as the US, Japan, Canada, and China all ramping up fiscal stimulus.
The report notes over 320 global interest rate cuts in the past two years and a record $137 trillion in global M2 money supply.
Despite these expansive conditions, Bitcoin continues to trade well below levels implied by monetary expansion.
Deep valuation gap identified by bitwise
Bitwise’s cointegration model suggests that Bitcoin is currently undershooting the global money supply by approximately 66%, pointing to a model-based fair value of around $270,000.
The firm stated that this represents a hypothetical upside of roughly 194% if Bitcoin returns to its long-term liquidity anchor.
Gold, on the other hand, has absorbed most of 2025’s liquidity bid and now overshoots global M2 by about 75%.
For more context on Bitcoin’s historical relationship with money supply and valuation models, see the bitcoin long term power law chart and the stock to flow chart.
Sharpe ratio and momentum metrics
Fidelity’s Director of Global Macro, Jurrien Timmer, highlighted that Bitcoin currently trails gold in momentum and Sharpe ratio, which measures risk-adjusted performance.
Timmer described the divergence as a potential mean-reversion setup, noting that:
“Bitcoin remains broadly aligned with its long-term power-law adoption curve despite its drawdown below $100,000.”
Bitcoin’s role as a monetary barometer
Bitwise emphasized that Bitcoin’s absolute scarcity has historically made it a sensitive barometer for monetary dilution.
With gold now overvalued relative to global money supply, Bitwise sees a strong case for an imminent rotation favoring Bitcoin if macro conditions persist.
