The crypto market expects Bitcoin (BTC) to reach $100,000, but when the global M2 money supply grows in 2025, BTC may see even greater increase.
Global Liquidity Surge: Bitcoin Catalyst?
Real Vision chief crypto analyst Jamie Coutts documented X's effects on the worldwide M2 money supply over the last several years.
The worldwide M2 money supply rose to $105 trillion from $94 trillion in Q4 2022, according to Coutts. Bitcoin's market valuation increased fivefold, from $400 billion to roughly $2 trillion at the time of writing. He added:
Bitcoin, like gold and stocks, has taken 10% of the new money supply from the fiat system. What happens if M2 grows $30T this cycle?
Due to global liquidity problems, the global M2 money supply is expected to reach $127 trillion in 2025, up 18% from $107 trillion. BTC's price might soar in 2025 if it captures 10% of this extra liquidity, or $2 trillion.
Coutts provided the following graphic comparing the Federal Reserve's balance sheet expansion, M2 money supply growth, real wage increases, and Bitcoin's price performance to support his claim. BTC has outperformed other assets, particularly as supply increases and the US currency depreciates.
Increasing money supply may boost Bitcoin, although researchers disagree on the degree of this association. The global M2 money supplyโcash and short-term bank depositsโis predicted to peak in January 2026 before falling to $118 trillion later that year. Bitcoin might hit $150,000 on this path.
But crypto expert Joe Consorti said that BTC's link with the global M2 money supply might pull it down 20% to 25%, to $70,000. BTC is too unpredictable to track against anything, said entrepreneur David Quintieri.
With the US approval of spot Bitcoin exchange-traded funds (ETF), the Bitcoin Halving, increased institutional use, and the November election triumph of pro-crypto Donald Trump, 2024 was a key year for the leading cryptocurrency.
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