Bitcoin Set for Major Rally in 2025 as US Dollar Weakens and Global Money Supply Grows
As the global money supply continues to rise and concerns about the U.S. dollar's strength grow, analysts predict that Bitcoin could see significant gains in 2025, with some forecasting a price surge to six figures.
On November 22, Bitcoin came within $200 of reaching its all-time high of $100,000 before experiencing a more than 7% pullback. Some experts believe the correction could lead to a drop of up to 30%, but others remain optimistic about Bitcoin’s future potential. Jamie Coutts, chief crypto analyst at Real Vision, believes that a reversal in the U.S. Dollar Index (DXY) and the expanding money supply will trigger Bitcoin’s next major rally in 2025. In a post on X, Coutts suggested that the Federal Reserve’s actions are setting the stage for a bullish market for risk assets.
A #Bitcoin bid has overshadowed tightening liquidity over the past month. Yes, there is a lag between liquidity and Bitcoin, and therefore $BTC seems overstretched vs. global M2. My liquidity model, which I flagged 3 weeks back, suggested caution, especially with leverage.… https://t.co/FFX7NjmtOe pic.twitter.com/Amw8rBE03e
— Jamie Coutts CMT (@Jamie1Coutts) November 27, 2024
Coutts has also pointed to the M2 money supply, which includes all cash and short-term deposits, as a key driver for Bitcoin’s price. After turning positive year-over-year in May 2023, the M2 money supply has been closely linked to Bitcoin’s performance, with the cryptocurrency up 58% since the turn.
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Bitcoin’s future gains could be bolstered by the global M2 supply, expected to rise as the U.S. Federal Reserve increases liquidity, possibly pushing the global money supply to over $127 trillion in 2025. This increase could help Bitcoin surpass $132,000 next year, according to Coutts. While he cautioned that Bitcoin’s cycles aren’t linear, he remains confident that Bitcoin could climb much higher.
Aside from monetary policy, political factors are also at play. Analysts from Bitfinex have highlighted that Bitcoin’s growth could be further fueled by the anticipated regulatory changes under a new administration, particularly following Donald Trump’s recent presidential victory. They also noted that MicroStrategy’s ongoing commitment to purchasing Bitcoin, including after raising $3 billion for more acquisitions, is likely to support the crypto market’s momentum. With Bitcoin nearing one million active daily addresses for the first time since 2019, signs of growing adoption further suggest that Bitcoin’s bullish trend could continue into the new year.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
