Bitcoin and S&P 500 valuations weaken when adjusted for U.S. money supply growth, signaling caution for investors.

When adjusted for the growth in the U.S. M2 money supply, both bitcoin and the S&P 500 show weaker valuations than their nominal prices suggest. Bitcoin's price relative to money supply has formed a bearish pattern, indicating its edge over dollar supply growth may be fading. Similarly, the S&P 500, despite nominal highs, has only recently matched its dot-com era peak on a money-supply-adjusted basis, suggesting that gains may be less robust than they appear. This signals potential caution for investors as liquidity-sensitive assets like bitcoin show signs of strain against expanding dollar supply.