The global money supply continues to expand. The latest data shows that nominal M2 is increasing for the five largest global currencies.

This is happening against the background of lower rates by most central banks (except the Bank of Japan, which always stands apart), which stimulates the growth of private lending.

The rate reduction phase has not yet been completed, which means that the overall growth in the money supply is likely to continue in the coming months. However, if we look at global M2 in dollar terms, it is falling.

The reason? The strengthening of the dollar, which is faster than the growth of the money supply in other currencies.

It is important to understand the nuance here. Formally, global M2 may seem stagnant, but in reality money continues to be printed. However, it still matters because:

— More than 50% of world trade is in dollars

— More than 50% of global debt is denominated in dollars

If the dollar strengthens sharply, debt servicing and trade settlements take away more and more liquidity from the rest of the world, leaving less money for financial markets.

A strong dollar acts as a boa constrictor that slowly squeezes global market liquidity, creating a headwind for risky assets.

Now the main question is: will we see a new surge in global M2, as in 2017 and 2020?

Back then, this process was accompanied by a "mini bubble" in all markets and one of the strongest years for Bitcoin.

For this to happen again in 2025, a weak dollar is needed.

Central banks will most likely not turn on the printing press at full power, as in the covid years, so for a new surge in liquidity, the dollar index (DXY) must fall to at least 100 or lower.

Is it possible? Yes. But a lot depends on Trump and his tariff policy.

If a new round of trade war leads to a weakening of the dollar, this may be the trigger that will trigger a new period of growth in global liquidity and demand for risky assets.