Bitcoin’s Potential Beyond $100,000: The Role of Global M2 Money Supply
The crypto market is abuzz with the anticipation of Bitcoin (BTC) crossing the $100,000 mark. However, the flagship cryptocurrency might have even greater growth prospects by 2025, influenced by the expanding global M2 money supply.
The Impact of Global Liquidity on Bitcoin’s Trajectory
Jamie Coutts, a leading crypto analyst at Real Vision, recently discussed the dynamics of the global M2 money supply on X. He highlighted its fluctuations over the past few years, pointing out that it bottomed out at $94 trillion in the fourth quarter of 2022 and has since increased to $105 trillion. During this period, Bitcoin’s market capitalization has skyrocketed, surging from around $400 billion to nearly $2 trillion.
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Coutts suggested that approximately 10% of the new money supply has transitioned from the traditional fiat system into Bitcoin, which is becoming an emerging global reserve asset. This trend is similar to how gold and equities have absorbed new financial influxes. He posits, “What happens if M2 expands by the usual $30 trillion this cycle?” With projections indicating that the global M2 money supply could surpass $127 trillion by 2025, largely due to global liquidity challenges, Bitcoin could capture a significant portion of this increase. If BTC absorbs 10% of this liquidity expansion, it could potentially witness a substantial price surge in 2025.
Assessing the Correlation Between Bitcoin and M2 Money Supply
There is a divergence of opinions regarding Bitcoin’s relationship with the expanding money supply. While some experts anticipate Bitcoin will benefit from this growth, others are skeptical about the strength of this correlation. The global M2 money supply is projected to peak in January 2026, reaching $118 trillion by the end of that year. During this period, there is potential for Bitcoin to achieve a price of $150,000.
Contrarily, crypto analyst Joe Consorti warns that Bitcoin’s correlation with the global M2 money supply might result in a 20% to 25% decline, potentially bringing its price down to $70,000. Entrepreneur David Quintieri adds that Bitcoin’s volatility makes it challenging to track against any fixed metric.
2024: A Transformative Year for Bitcoin
The year 2024 has been pivotal for Bitcoin, marked by significant events such as the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, the anticipated Bitcoin Halving, increasing institutional adoption, and the election of pro-crypto Donald Trump. These developments have fostered a bullish environment, prompting institutional investors to set ambitious price targets for BTC. Currently, Bitcoin is trading at $97,944, reflecting a 3.1% rise in the past 24 hours.
As the global economic landscape evolves, Bitcoin’s journey towards new price milestones will be closely watched, with the expanding global M2 money supply playing a crucial role in shaping its future trajectory.
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