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

by

As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous market cycles and trends that have shaped the global economy. In light of Jamie Coutts’ insightful analysis, it seems plausible to me that Bitcoin could indeed benefit significantly from the projected expansion of the global M2 money supply.

As Bitcoin (BTC) is anxiously awaited to surpass the $100,000 mark by crypto market enthusiasts, there’s a strong possibility that it could see further growth in the year 2025, given the anticipated expansion of the global M2 money supply.

Global Liquidity Surge: A Catalyst For Bitcoin?

In their comprehensive study about X, Jamie Coutts – head crypto analyst at Real Vision – highlighted fluctuations in the worldwide M2 money supply expansion and reduction during recent times for his audience’s consideration.

In the fourth quarter of 2022, the worldwide M2 money supply reached a low of $94 trillion, but it has since increased to $105 trillion. During this same period, Bitcoin’s market value multiplied more than five times, growing from around $400 billion to almost $2 trillion as we speak. To add to that, Coutts mentioned:

Put simply, one-tenth of the freshly minted currency has moved from the traditional fiat system into the growing global reserve asset, Bitcoin. If the M2 money supply increases by its typical $30 trillion during this economic cycle, what could happen remains to be seen.

Significantly, it’s predicted that the worldwide M2 money supply will exceed $127 trillion by 2025, primarily due to global liquidity issues, which represents a rise of over 18% from its current level of $107 trillion. If approximately 10% of this additional liquidity, or around $2 trillion, flows into Bitcoin (BTC), the digital asset’s value could experience a significant increase in 2025.

As a researcher delving into the subject, I recently presented a chart that juxtaposed the Federal Reserve’s balance sheet expansion, the growth of U.S. M2 money supply, U.S. real wage changes, and Bitcoin’s price dynamics. The data unearthed in this analysis suggests that Bitcoin has notably surpassed other financial instruments, particularly as the value of the U.S. dollar wanes with an escalating supply.

Mixed Views On BTC And Money Supply Correlation

Some analysts predict that an increasing money supply might boost the value of Bitcoin, but whether this relationship is robust isn’t universally agreed upon. The global M2 money stock, encompassing all cash and short-term bank deposits, is projected to hit its maximum in January 2026 at around $118 trillion before shrinking again that year. Under this scenario, it’s possible Bitcoin could reach a value of $150,000.

On a different note, crypto analyst Joe Consorti warned that Bitcoin’s link with the worldwide M2 money supply could potentially decrease its value by 20% to 25%, bringing it down to roughly $70,000. In response, entrepreneur David Quintieri stated that due to its volatility, Bitcoin is not suitable for being compared or tracked against anything in a meaningful way.

2024 stands out as a significant year for the foremost digital currency, marked by events such as the U.S. approval of Bitcoin spot exchange-traded funds (ETFs), the Bitcoin Halving, increased institutional investment, and the election of pro-crypto candidate Donald Trump in November.

In this optimistic financial climate, it’s no wonder that institutional investors are voicing their high expectations for Bitcoin prices. Currently, Bitcoin is trading at around $97,944, marking a 3.1% increase over the last day.

Read More

2024-11-30 19:56