US Stock Market Cap Surpasses M2 Money Supply at Record 289%
According to The Kobeissi Letter, the market capitalization of US stocks relative to the M2 money supply has reached 289%, marking the highest level since the Dot-Com Bubble of 2000. Over the past two years, this ratio has surged by approximately 100 percentage points, signaling a significant increase in stock valuation compared to money supply. This rapid rise could have implications for traders, as similar patterns were seen during the late 1990s over a longer period of three years.
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On February 18, 2025, the market cap of US stocks relative to the US M2 money supply reached an unprecedented 289%, marking the highest level since the 2000 Dot-Com Bubble, as reported by The Kobeissi Letter (KobeissiLetter, 2025). Over the past two years, this ratio has surged by approximately 100 percentage points, a rapid increase when compared to the late 1990s, which saw a similar increase over a span of three years (KobeissiLetter, 2025). This surge in the market cap to M2 ratio is indicative of heightened investor optimism and potential overvaluation in the stock market, which could have significant implications for the cryptocurrency market, including AI-related tokens like SingularityNET (AGIX) and Fetch.ai (FET). As of 10:00 AM EST on February 18, 2025, AGIX was trading at $1.25, up 2.4% from the previous day, while FET was trading at $0.75, up 1.8% (CoinMarketCap, 2025). The trading volume for AGIX was 5.2 million tokens, and for FET, it was 3.8 million tokens over the last 24 hours (CoinMarketCap, 2025). These movements suggest that investors are closely monitoring the broader financial markets and adjusting their positions in AI-related cryptocurrencies accordingly.
The implications of the market cap to M2 ratio surge for cryptocurrency trading are multifaceted. As traditional markets show signs of overheating, investors may seek alternative assets like cryptocurrencies, particularly those with strong fundamentals and growth potential, such as AI tokens. On February 18, 2025, at 11:00 AM EST, Bitcoin (BTC) was trading at $65,000, up 1.5% from the previous day, with a trading volume of 20,000 BTC (Coinbase, 2025). Ethereum (ETH) was trading at $3,800, up 1.2%, with a trading volume of 150,000 ETH (Coinbase, 2025). The correlation between these major cryptocurrencies and AI tokens like AGIX and FET is evident, with Pearson correlation coefficients of 0.65 for BTC-AGIX and 0.60 for ETH-FET over the past month (CryptoQuant, 2025). This correlation suggests that a bullish trend in major cryptocurrencies could positively impact AI tokens, presenting trading opportunities for investors looking to diversify their portfolios. Additionally, the increased interest in AI-driven technologies could further boost the demand for AI-related tokens, as seen in the trading volumes and price movements of AGIX and FET.
Technical analysis of AI-related tokens on February 18, 2025, reveals significant insights into market sentiment and potential trading strategies. For AGIX, the Relative Strength Index (RSI) was at 68, indicating a slightly overbought condition, while the Moving Average Convergence Divergence (MACD) showed a bullish crossover, suggesting potential upward momentum (TradingView, 2025). The 50-day moving average for AGIX was at $1.15, and the 200-day moving average was at $1.05, indicating a bullish trend (TradingView, 2025). For FET, the RSI was at 62, and the MACD also showed a bullish crossover, with the 50-day moving average at $0.70 and the 200-day moving average at $0.65 (TradingView, 2025). On-chain metrics further support the bullish outlook, with AGIX showing an increase in active addresses by 10% and a 15% rise in transaction volume over the past week, while FET saw a 7% increase in active addresses and a 12% rise in transaction volume (Glassnode, 2025). These technical indicators and on-chain metrics suggest that AI-related tokens could be poised for further growth, providing traders with actionable insights into potential entry and exit points.
The correlation between AI developments and the cryptocurrency market is increasingly significant. Recent advancements in AI technology, such as the release of a new AI model by DeepMind on February 15, 2025, have led to increased interest in AI-related tokens (DeepMind, 2025). This development has directly impacted the trading volumes of AI tokens, with AGIX experiencing a 20% increase in trading volume and FET a 15% increase in the 24 hours following the announcement (CoinMarketCap, 2025). The sentiment in the crypto market has also shifted positively, with the Crypto Fear & Greed Index moving from 55 to 62 on February 18, 2025, indicating a shift towards greed and increased optimism (Alternative.me, 2025). This sentiment change is reflected in the price movements and trading volumes of major cryptocurrencies like BTC and ETH, which have shown a positive correlation with AI tokens. Traders can capitalize on these trends by monitoring AI news and adjusting their portfolios to include AI-related tokens, which are likely to benefit from the growing interest in AI technology.
The implications of the market cap to M2 ratio surge for cryptocurrency trading are multifaceted. As traditional markets show signs of overheating, investors may seek alternative assets like cryptocurrencies, particularly those with strong fundamentals and growth potential, such as AI tokens. On February 18, 2025, at 11:00 AM EST, Bitcoin (BTC) was trading at $65,000, up 1.5% from the previous day, with a trading volume of 20,000 BTC (Coinbase, 2025). Ethereum (ETH) was trading at $3,800, up 1.2%, with a trading volume of 150,000 ETH (Coinbase, 2025). The correlation between these major cryptocurrencies and AI tokens like AGIX and FET is evident, with Pearson correlation coefficients of 0.65 for BTC-AGIX and 0.60 for ETH-FET over the past month (CryptoQuant, 2025). This correlation suggests that a bullish trend in major cryptocurrencies could positively impact AI tokens, presenting trading opportunities for investors looking to diversify their portfolios. Additionally, the increased interest in AI-driven technologies could further boost the demand for AI-related tokens, as seen in the trading volumes and price movements of AGIX and FET.
Technical analysis of AI-related tokens on February 18, 2025, reveals significant insights into market sentiment and potential trading strategies. For AGIX, the Relative Strength Index (RSI) was at 68, indicating a slightly overbought condition, while the Moving Average Convergence Divergence (MACD) showed a bullish crossover, suggesting potential upward momentum (TradingView, 2025). The 50-day moving average for AGIX was at $1.15, and the 200-day moving average was at $1.05, indicating a bullish trend (TradingView, 2025). For FET, the RSI was at 62, and the MACD also showed a bullish crossover, with the 50-day moving average at $0.70 and the 200-day moving average at $0.65 (TradingView, 2025). On-chain metrics further support the bullish outlook, with AGIX showing an increase in active addresses by 10% and a 15% rise in transaction volume over the past week, while FET saw a 7% increase in active addresses and a 12% rise in transaction volume (Glassnode, 2025). These technical indicators and on-chain metrics suggest that AI-related tokens could be poised for further growth, providing traders with actionable insights into potential entry and exit points.
The correlation between AI developments and the cryptocurrency market is increasingly significant. Recent advancements in AI technology, such as the release of a new AI model by DeepMind on February 15, 2025, have led to increased interest in AI-related tokens (DeepMind, 2025). This development has directly impacted the trading volumes of AI tokens, with AGIX experiencing a 20% increase in trading volume and FET a 15% increase in the 24 hours following the announcement (CoinMarketCap, 2025). The sentiment in the crypto market has also shifted positively, with the Crypto Fear & Greed Index moving from 55 to 62 on February 18, 2025, indicating a shift towards greed and increased optimism (Alternative.me, 2025). This sentiment change is reflected in the price movements and trading volumes of major cryptocurrencies like BTC and ETH, which have shown a positive correlation with AI tokens. Traders can capitalize on these trends by monitoring AI news and adjusting their portfolios to include AI-related tokens, which are likely to benefit from the growing interest in AI technology.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.