Recent evaluations suggest that Bitcoin is poised for substantial growth, with estimates of an influx of $2 trillion in investments flooding into the cryptocurrency by 2025.
This potential surge is linked to the U.S. Federal Reserve’s anticipated moves to inject significant liquidity into the global economy, thereby influencing Bitcoin’s market valuation and price trends.
Bitcoin and M2 Money Supply
Jamie Coutts, a prominent crypto analyst at Real Vision, predicts that the M2 money supply, which measures the total money available in the economy, will increase from $107 trillion to over $127 trillion over the next few years.
This projected rise of 18%, driven by a mix of economic conditions and changes in monetary policy, could be a critical catalyst for Bitcoin’s advancement.
Coutts highlights an intriguing pattern: historically, Bitcoin has captured about 10% of any newly introduced liquidity.
This suggests that the cryptocurrency is well-positioned to attract significant investment as this liquidity influx unfolds.
Market Behavior and Trends
He further emphasizes Bitcoin’s responsiveness to shifts in global liquidity.
Between the fourth quarter of 2022 and now, the M2 money supply expanded from $94 trillion to $105 trillion.
During this same period, Bitcoin’s market cap ballooned, increasing by approximately $1.5 trillion—demonstrating that Bitcoin absorbed about 10% of the new liquidity entering the market.
This trend reinforces Bitcoin’s emergence as a vital reserve asset on a global scale.
With an expected $20 trillion increase in liquidity by 2025, Bitcoin could theoretically garner an impressive $2 trillion investment influx.
Coutts believes that the combination of monetary debasement and Bitcoin’s remarkable annualized returns—exceeding 113%—will only heighten institutional interest in the cryptocurrency.
As concerns grow regarding the stability of traditional fiat currencies, more investors may turn to Bitcoin as an enticing alternative.
Future Projections
Looking ahead, Coutts suggests that by January 26, 2026, the M2 money supply could peak, coinciding with ongoing expansions in monetary policy.
This timeline aligns with his prediction that Bitcoin’s price may reach $150,000 by 2025, fueled by declining confidence in the U.S. dollar and the fiat currency system overall.
Such a shift could drive investors to seek out safer havens for their wealth.
As Bitcoin continues to showcase its resilience and profitability, the likelihood of increased institutional interest grows.
With its burgeoning reputation as a hedge against inflation and monetary devaluation, Bitcoin may become a favored choice for a wider range of investors who prioritize stability during times of economic upheaval.
Source: Bitcoinist
