How does the Nasdaq 100 stack up against M2 Money Supply? It's a question worth asking when you're trying to understand what's really happening in the markets.

When monetary policy loosens and M2 expands aggressively, equity markets tend to follow. But the relationship isn't always linear. There are periods where stock valuations decouple from money supply growth—sometimes surging ahead, sometimes lagging behind.

This divergence matters. If the Nasdaq 100 is climbing while M2 growth stalls, it signals market strength driven by fundamentals rather than liquidity. Conversely, when M2 pumps but equities barely move, it might indicate weakening demand or shifting investor sentiment.

For crypto traders, this context is gold. Understanding how traditional markets price in monetary conditions helps you anticipate liquidity cycles and capital flow shifts that often precede altcoin rallies or corrections. The macro picture sets the stage.