The newest insight Experts have revealed that Bitcoin is poised to benefit from a massive liquidity injection expected before 2025, potentially attracting $2 trillion in new investments into BTC.
This prediction comes from expectations that the US Federal Reserve will significantly increase the global money supply, which could increase BTC’s market capitalization. price performance.
Liquidity growth and the market implications of Bitcoin
According to Jamie Coutts, chief crypto analyst at Real Vision, the global money supply, also known as M2, is expected to grow from the current $107 trillion to over $127 trillion by 2025. This 18% increase in liquidity is driven by economic factors . and monetary policy, can act as a crucial catalyst for BTC.
Coutts highlights that BTC has historically captured around 10% of newly injected liquidity, suggesting that the cryptocurrency could see significant inflows in the coming period.
Coutts explained that BTC’s performance is closely linked to liquidity movements in the global financial system. Historical data shows that between the fourth quarter of 2022 and now, the global M2 money supply increased from $94 trillion to $105 trillion.
Global M2 bottomed out at $94 billion in the fourth quarter of 2022 and has since risen to $105 billion. During this period, Bitcoin’s market cap increased fivefold, adding $1.5 trillion. In other words, 10% of the new money supply has leaked from the fiat system into the emerging global reserve of Bitcoin (gold, stocks, etc.). pic.twitter.com/w0vWIMufbg
— Jamie Coutts CMT (@Jamie1Coutts) November 28, 2024
During the same period, Bitcoin’s market cap increased fivefold, adding $1.5 trillion. These figures indicate that Bitcoin has absorbed around 10% of the new liquidity entering the system, cementing its role as an emerging global reserve asset.
With an expected $20 trillion liquidity boost by 2025, Bitcoin could potentially attract $2 trillion in new investments. Coutts’ analysis highlights that monetary reduction, in addition to Bitcoin’s superior annualized return of over 113%, is likely to institutional adoption of cryptocurrency.
This trend positions BTC as an “increasingly attractive alternative” to traditional investment vehiclesespecially as concerns about the strength of the fiat currency persist.
Bitcoin’s 2025 Prospects and Institutional Adoption
Coutts further predicts that the global M2 money supply will peak on January 26, 2026, as economic policies continue to expand the monetary base.
This timeline matches the predictions of the price of BTC potentially reach $150,000 in 2025. This growth is expected to be fueled by weakening confidence in the US dollar and the broader fiat system, encouraging investors to seek alternative stores of value.
Notably, institutional interest in BTC is also likely to increase as the asset demonstrates its resilience and profitability. With a growing reputation as hedge against inflation and monetary reduction, Bitcoin may attract a wider range of investors seeking stability amid economic uncertainty.
Featured image created with DALL-E, Chart from TradingView