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The Satoshi Oath

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The money supply is at a record. The Fed's balance sheet isn't driving it.

Not financial advice

This is the first issue of The Satoshi Oath. I write about Bitcoin through a macro lens: monetary policy, inflation, liquidity, real rates, sovereign debt, ETF flows, and market structure. Every Monday I'll send one short issue with the week ahead and one idea worth your time, backed by a chart. Every number is sourced and dated. I make no price calls and will show you the risks as plainly as the case. Thanks for being here at the start.

Upkeep: the week of Oct 19–23

This is a quiet week for scheduled US data, which makes it the calm before a busy one.

  • Thu, Oct 22, 4:30 PM ET: Fed balance sheet (H.4.1). The weekly snapshot of the Fed's total assets. The latest reading is $6.76 trillion.
  • That's the only major scheduled release on my calendar this week. No CPI, no jobs report, no Fed decision.

Next week is where the action is:

  • Tue, Oct 27, 1:00 PM ET: Money stock (H.6), September M2.
  • Wed, Oct 28, 2:00 PM ET: FOMC decision, press conference at 2:30 PM. The current target range is 3.75–4.00%.
  • Thu, Oct 29, 8:30 AM ET: Q3 GDP (advance) and September PCE inflation (BEA).
  • Fri, Oct 30, 8:30 AM ET: Employment Cost Index, Q3 (BLS).

I'll post the FOMC decision and the market reaction on X the same afternoon.

The idea: the money supply is at a record, but the Fed's balance sheet isn't driving it

Here's the chart I keep coming back to: US M2, the Fed's balance sheet, and Bitcoin since 2016.

Chart: US M2 and Fed total assets (trillions USD) vs. BTC/USD, Jan 2016 to Oct 2026. Sources: FRED M2SL, WALCL, CBBTCUSD.

Three things stand out.

1. M2 is at an all-time high. US M2 was $23.34 trillion in August 2026, up 5.7% from a year earlier. It peaked at $21.79 trillion in March 2022, shrank into late 2023, and is now about 7% above that old peak. Broad money is growing again.

2. The Fed's balance sheet isn't driving it. Fed total assets are $6.76 trillion, up only 2.4% year over year and still about 25% below the April 2022 peak of $8.97 trillion. In 2020–21, money growth and the Fed's balance sheet rose together. This time, money is growing while the Fed's balance sheet is roughly flat. That matters: growth that isn't coming from an expanding Fed balance sheet can reverse in different ways, and it doesn't come with a Fed "put."

3. Bitcoin hasn't followed, yet. BTC was $81,978 on Oct 18, about 34% below its October 2025 peak of $124,720. So if liquidity is rising, why isn't Bitcoin?

One explanation consistent with the data: the price of money. The 10-year real yield (TIPS) is 2.78%, up from 1.76% a year ago. Before this year, the last time it was this high was November 2008. When 10-year Treasuries pay nearly 2.8% above inflation, a zero-yield asset faces real competition, even with money growing in the background.

So the setup heading into the Oct 28 FOMC is a tug-of-war: quantity of money up, price of money high. Right now they point opposite ways. I'm watching for the moment real yields roll over. That, more than any single headline, is what I think would let the liquidity tailwind show up in the price.

The Bitcoin check. Does Bitcoin's own behavior confirm that read? Only partly. BTC is 7.0% above its 50-week moving average of $76,589, but that average is still falling. And US spot Bitcoin ETFs saw net outflows of $228 million over Oct 12–16. Liquidity is rising; ETF demand isn't confirming it yet. My verdict for now: mixed.

Could I be wrong? Yes. Liquidity is one driver, not the only one. Lags vary, and correlations break. I'll keep showing you the data either way.

What I'm watching this week

  • Whether the 10-year real yield stays near its highest level since 2008.
  • Thursday's H.4.1: is the Fed's balance sheet still flat, or starting to move?
  • How the market prices Oct 28. I'll share a sourced read on the morning of the decision.

We keep the oath.

— The Satoshi Oath Follow on X: @TheSatoshiOath

Sources (all accessed Oct 18, 2026)

Educational macro commentary. Not financial advice. Nothing here is a recommendation to buy or sell any asset. Past performance and historical relationships don't guarantee future results.