As a seasoned analyst with over two decades of experience in global finance and economics, I find the potential Bitcoin bull rally in 2025 quite intriguing. Having witnessed the rise and fall of various financial bubbles, I must admit that the correlation between the growing global M2 supply and Bitcoin price is fascinating.
In simple terms, by 2025, an increase in the worldwide money supply and a possible weakening of the U.S. dollar might lead to a significant surge in Bitcoin’s value, with experts predicting it could reach over $100,000.
On November 22nd, Bitcoin (BTC) came within $200 or a mere 0.2% of reaching its all-time high of $100,000, but subsequently underwent a correction of over 7%. Some experts speculate that this could cause Bitcoin to drop by up to 30% in value.
In contrast, an increase in global money supply and a possible price change in the US Dollar Index (DXY) could pave the way for Bitcoin’s surge in 2025, as suggested by Jamie Coutts, the chief crypto analyst at Real Vision, in his November 27 post.
“DXY could have topped here. The lag effect that Fintwit is focused on atm is still real, but ultimately, the Fed is waving the bull flag for risk assets again. Bullish 2025.”
Previously, Coutts identified the M2 money supply, which represents the total amount of cash and short-term bank deposits in the U.S., as a significant factor that could potentially trigger the next surge in Bitcoin prices, given its historical relationship with Bitcoin’s pricing.
For the first time since November 2023, the M2 money supply showed a growth compared to the previous year in early May, leading investors to consider safeguards against inflation, like Bitcoin, which has seen a 58% increase in value since the money supply change.
Bitcoin to breach $132,000 in 2025 on growing global M2 supply
The potential expansion of the worldwide M2 money supply, anticipated as a result of liquidity injections by the U.S. Federal Reserve, might similarly boost Bitcoin’s value.
As a researcher examining economic trends, I’ve found that there’s a possibility that the Federal Reserve might boost the global money supply significantly by 2025. Currently, we’re looking at around $107 trillion in circulation. However, if all goes as predicted, this figure could rise to over $127 trillion, representing an approximately 18% increase from the current level.
As a crypto investor, I’m intrigued by the projection that the increasing money supply could potentially drive the value of Bitcoin beyond $132,000 in the coming year, as suggested by the chart presented by Coutts. They further elaborated on this forecast.
“Longer term, this is where I am at for this cycle; a 12-month forecast based on linear relationship with liquidity. But Bitcoin cycles are not linear. I think we go much higher than this.”
On the other hand, Coutts pointed out that the DXY has reached a substantial barrier point. If it manages to surpass this level, as suggested by the analyst, such an event wouldn’t bode well for risky investments.
Trump’s victory to drive Bitcoin’s 2025 rally, beyond just DXY
The strength or weakness of the U.S. dollar isn’t the sole determinant of Bitcoin prices; rather, significant price increases for Bitcoin were observed following Donald Trump’s victory in the November 5th U.S. Presidential Election as well.
Trump’s win sparked a fresh surge of investment confidence, likely fueling the anticipated cryptocurrency boom in 2025, as suggested by Bitfinex analysts to CryptoMoon.
“We expect all crypto assets however to continue to make new highs into the new year once the Trump administration takes over and the industry benefits from an increasingly supportive regulatory environment.”
Bitcoin might gain further strength due to MicroStrategy’s ongoing Bitcoin purchases following their recent $3 billion fundraising round, as indicated by the analysts. This additional capital is intended for acquiring even more Bitcoins.
“MicroStrategy has only completed 29% of its 12/21 plan to purchase over $40b worth of Bitcoin.”
Currently, Bitcoin is almost reaching a milestone of one million daily active users for the first time since 2019. This increase in usage is yet another indication of growing adoption for the pioneering cryptocurrency, which may lead to further price increases.
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2024-11-27 16:58