When I recently reviewed the M2 money supply data from the St. Louis Fed (FRED), one thought kept running through my mind — the purchasing power of the US dollar is being gradually diluted by the Federal Reserve's policies. Looking at the chart showing M2 rising steadily since 1950, with a near-vertical spike in recent years, the data for November 2025 has already reached $22.3224 trillion. Combined with the Fed's latest policy announcement — a 25 basis point interest rate cut and a commitment to purchase $20 billion in short-term Treasury bonds monthly — as a cryptocurrency professional, I increasingly believe that cryptocurrencies like Bitcoin are no longer 'optional' but a 'must-have' in any asset allocation strategy.
Let's first discuss the essence of the Fed's current move. The official explanation is that bond purchases are to address banking liquidity pressures during the April tax season, preventing short-term funding strain. But anyone with eyes can see that April is still months away, and the Fed already has emergency tools like the standing repo facility. This proactive and large-scale monetary easing ultimately just continues the logic of quantitative easing. Lowering interest rates plus buying $20 billion in Treasury bonds monthly is essentially flooding the market with newly printed money, which inevitably further weakens the dollar's credibility.
Looking again at the harsh reality revealed by M2 data: M2 is the core indicator measuring money supply. From the chart, it's clear that the issuance of the US dollar has long detached from the anchor of actual economic growth. Over the past decades, especially after 2020, the sharp rise in M2 directly corresponds to the plummeting purchasing power of the dollar—what you could buy with $100 today might only be worth $90 tomorrow. The fatal flaw of fiat currency lies in the central bank's ability to print money without limit based on policy needs. This 'unlimited supply' nature ensures that fiat devaluation is a long-term, irreversible trend.
The core value of Bitcoin stands precisely in opposition to fiat currency. The total supply of Bitcoin is algorithmically and permanently capped at 21 million coins—no country or institution can arbitrarily increase it. This absolute scarcity is the foundation of its resistance to inflation. The Fed can print $20 billion a month to buy Treasury bonds and drive the M2 curve skyward, but no one can alter Bitcoin's issuance rules or magically create a new Bitcoin. This is why every time the Fed starts a monetary easing cycle, the market re-evaluates Bitcoin's safe-haven and inflation-hedging attributes—when the value of fiat currencies keeps shrinking under the printing press, scarce digital assets naturally become the 'safe harbor' for capital.
As someone working in the cryptocurrency industry, I've seen countless investors turn to the crypto market seeking asset preservation due to fiat currency depreciation. The US dollar's credit system is built on Fed policy, and the Fed's core priority has always been 'protecting the economy and financial system'—meaning 'printing money' is the norm. But Bitcoin is decentralized; it's not controlled by any sovereign nation or financial institution. This characteristic makes it a standalone store of value during times of fiat system instability. When the Fed resorts to printing money to solve all economic problems, Bitcoin becomes the people's 'weapon' against currency devaluation.
Looking at the M2 curve still extending upward, and with no sign of the Fed's monetary easing stopping, we really don't have many choices. Either watch our fiat currencies continuously erode in value due to inflation, or allocate part of our assets into cryptocurrencies like Bitcoin, which have scarcity and inflation-resistant properties. For those in the crypto industry, this isn't just faith in the sector—it's a real-life asset defense battle against the tide of fiat currency devaluation.
