This chart compares the monetary velocity against M1 and M2 USD money stock.
Velocity is a measure of how quickly money is circulating in the economy. By plotting Bitcoin's velocity against M1 and M2 money supply we can see whether Bitcoin use is trending towards payments or towards savings/investment.
M1 = "near cash" (typically held for short/medium term expenses)
M2 = "near cash" + "liquid non-cash assets" (majority held for longer term savings)
Bitcoin's velocity is calculated by dividing the 90 day estimated USD transaction volume by the 90 day average USD market cap. (This is the equivalent to the $BTC circulated divided by the Bitcoin money supply.)