Gold and Bitcoin Near Historic Valuation Relative to US Money Supply

Jurrien Timmer, Director of Global Macro at Fidelity, suggests that the rally in gold and Bitcoin, driven by their role as hedges against dollar devaluation and inflation, may be nearing its limit. Timmer compares the current market to the 1980 inflation peak by aggregating the inflation-adjusted market value of gold and Bitcoin against the US M2 money supply.

Historically, gold's value surged to 123% of M2 in 1933 and 140% in 1980. Currently, the combined value of gold and Bitcoin stands at approximately $29 trillion, representing 133% of the M2 supply, surpassing the 1933 peak and nearing the 1980 high. Timmer views this as a "critical point."

This valuation suggests that the significant returns driven by fears of monetary expansion might be largely complete, implying that while both assets remain sound long-term hedges, the "easy returns" phase fueled by inflation concerns may be over.

(Source：BeInCrypto)