Emily Walker
The crypto community is eagerly watching Bitcoin (BTC) as it approaches the $100,000 mark, with potential for even greater growth in 2025 as the global M2 money supply continues to rise.
Is Global Liquidity a Boost for Bitcoin?
In a thorough report on X, Jamie Coutts, the chief crypto analyst at Real Vision, highlighted the recent changes in the global M2 money supply.
Coutts mentioned that after hitting a low of $94 trillion in Q4 2022, the global M2 money supply has now climbed to $105 trillion. During this same time, Bitcoin’s market capitalization surged from about $400 billion to nearly $2 trillion. He observed:
To put it differently, 10% of the new money supply has shifted to Bitcoin, which is emerging as a global reserve asset (alongside gold and equities). What if M2 balloons by another $30 trillion this cycle?
The global M2 money supply is expected to surpass $127 trillion in 2025, reflecting an increase of more than 18% from its current level of $107 trillion. If we assume that Bitcoin captures 10% of this new liquidity, equating to about $2 trillion, its price could dramatically rise in 2025.
Coutts further supported his view with a chart showing trends in the Federal Reserve’s balance sheet, U.S. M2 money supply growth, changes in real wages, and Bitcoin’s price trajectory. The analysis indicates that BTC has greatly outperformed other investment vehicles, especially as the value of the U.S. dollar falls due to increased supply.
Conflicting Opinions on BTC and M2 Correlation
While certain analysts believe Bitcoin stands to gain from the expanding money supply, there are varied opinions on the extent of this correlation. The global M2 money supply, comprising all cash and short-term deposits, is anticipated to peak in January 2026 before contracting to around $118 trillion later that year. Based on this forecast, Bitcoin might reach $150,000.
Conversely, analyst Joe Consorti warned that the correlation between BTC and the global M2 money supply could lead to a price drop of 20% to 25%, possibly bringing it down to $70,000. Entrepreneur David Quintieri responded by indicating that Bitcoin’s volatility makes it challenging to track meaningfully against any metric.
The year 2024 has proven crucial for Bitcoin, marked by the approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S., the Bitcoin Halving event, escalating institutional interest, and the recent election success of pro-crypto candidate Donald Trump.
With such a positive environment, it’s no wonder that institutional investors are setting high price targets for BTC. The current trading price of Bitcoin stands at $97,944, reflecting a 3.1% increase over the last 24 hours.
