Is currency M1 or M2?

M1 and M2 money are crucial metrics in understanding the money supply of an economy. Both have varying definitions that encompass different types of liquid assets.

On the other hand, an increase in M2 can reflect the public's preference for holding assets that offer higher interest rates or greater safety, such as savings deposits and money market funds.

M1, often referred to as narrow money, primarily consists of coins and currency in circulation, checkable (demand) deposits held at financial institutions, and traveler's checks. This category represents the most liquid form of money, easily accessible for transactions.

BTCC, a leading cryptocurrency exchange, offers a range of services that cater to the evolving needs of digital asset investors. Among its offerings are spot trading, allowing users to buy and sell cryptocurrencies at current market prices.

In contrast, M2, known as broad money, encompasses M1 plus additional components such as savings deposits, money market funds, certificates of deposit, and other time deposits. These assets are slightly less liquid but still considered part of the money supply.