The lines on the graph seem to be too close in lockstep for me to see anything causal or predictive in them.
The graph simply says to me: "More money has been invested in the market over time, the market has generally been worth more over time."
The graph simply says to me: "More money has been invested in the market over time, the market has generally been worth more over time."
However, there can be money created by the market, because people and companies can borrow money while using the value of the assets they own as collateral. This borrowing does cause new money to appear from thin air, which means that the market is a source of money, not a sink. As this borrowed money increases the money supply just like physical money-printing would, the price of assets tends to rise along with it, as much of that borrowed money gets put towards buying those assets, increasing the number of buyers, and someone has to be convinced to sell.
This creates an unstable feedback loop of rising borrowing against rising asset prices causing higher asset prices, and it can of course operate in the reverse mode as well, where falling asset prices result in loans being called in, causing the money supply to shrink, pushing asset prices down even further.
(This crash is not a necessary outcome; if the assets correspond to productive investments and real growth, this results in abundance which can in various ways allow those debts to be held or paid off without falling asset prices.)
The phenomenon I described can happen with many or with few transactions. It only requires more buyers than sellers, and money creation through borrowing against the rising price of assets. Creation of money through borrowing is not an increase in the velocity of money, it's an increase in the supply of money.
The US was borrowing based on nothing and eventually people figured that out and wanted to trade the nothing for gold which prompted the US to "fix the glitch" and stop gold redemption.
It's not like leaving the gold standard caused us to borrow based on nothing; we already decided to do that.