Bitcoin Could Capture 10% Of $20 Trillion Global Money Supply Growth In 2025, Analyst Predicts

While the crypto market eagerly anticipates Bitcoin (BTC) breaking the $100,000 price level, the premier cryptocurrency could have much more room for growth in 2025 as the worldwide M2 money supply expands.

Global Liquidity Surge: A Catalyst For Bitcoin?

In an in depth evaluation on X, Jamie Coutts, chief crypto analyst at Real Vision, brought his follower’s attention to the expansion and contraction of the worldwide M2 money supply over the past few years.

Coutts noted that after bottoming out at $94 trillion in Q4 2022, the worldwide M2 money supply has risen to $105 trillion. Over the identical period, Bitcoin’s market capitalization soared fivefold, from roughly $400 billion to almost $2 trillion on the time of writing. He added:

In other words, 10% of the brand new money supply has leaked from the fiat system into the emerging global reserve asset of Bitcoin (gold, equities etc have absorbed latest money as well). What happens if M2 expands by the same old $30T this cycle?

Notably, the global M2 money supply is projected to surge past $127 trillion in 2025 because of global liquidity concerns – a rise of greater than 18% from the present $107 trillion. Assuming that 10% of this increased liquidity – about $2 trillion – is captured by BTC, the digital asset’s price could skyrocket in 2025.

Source: Jamie Coutts on X

To strengthen his argument, Coutts shared the next chart comparing the Federal Reserve’s balance sheet expansion, U.S. M2 money supply growth, U.S. real wage changes, and Bitcoin’s price performance. The info reveals that BTC has significantly outperformed other instruments, especially because the US dollar depreciates with increasing supply.

Mixed Views On BTC And Money Supply Correlation

While some analysts foresee Bitcoin benefiting from the expanding money supply, opinions differ regarding the strength of this correlation. The worldwide M2 money supply, which incorporates all money and short-term bank deposits, is anticipated to peak by January 2026 before contracting to $118 trillion later that yr. Along this trajectory, Bitcoin could potentially reach $150,000.

In contrast, nevertheless, crypto analyst Joe Consorti cautioned that BTC’s correlation with the worldwide M2 money supply could drag it down 20% to 25%, all the way in which all the way down to $70,000. In reply, entrepreneur David Quintieri said BTC is simply too volatile to be meaningfully tracked against anything.

2024 has been a pivotal yr for the leading cryptocurrency, with the approval of spot Bitcoin exchange-traded funds (ETF) within the US, the Bitcoin Halving, rising institutional adoption, and the victory of pro-crypto Donald Trump within the November election.

Against such bullish backdrop, it’s not surprising to see ambitious BTC price targets being shared by institutional investors. BTC trades at $97,944 at press time, up 3.1% previously 24 hours.