The global money supply is projected to increase significantly in 2025, leading to a potential capital inflow into the leading cryptoasset bitcoin (BTC). A recent analysis predicts that the United States Federal Reserve’s monetary policies could expand the global money supply by a whopping$20 trillion in 2025. A portion of this potential $20 trillion new money or liquidity injection is expected to enter the crypto market, with BTC projected to attract at least $2 trillion in new investments.
Bitcoin is poised for substantial growth in 2025 with projections indicating an influx of $2 trillion in investments.
Jamie Coutts, chief crypto analyst at Real Vision, attributes this potential surge in BTC price to expectations of global money supply expansion. In an X post, he noted that the U.S. Federal Reserve is projected to increase the global money supply to $127 trillion in 2025, up from the current $107 trillion in 2024. This 18% rise in global money supply could inject more liquidity into the crypto market, acting as a catalyst for a positive BTC price performance in 2025.
Coutts emphasized bitcoin’s historical ability to absorb liquidity during periods of global money expansion. He stated, “Global M2 bottomed at $94 trillion in Q4 2022 and has since climbed to $105 trillion. During this period, Bitcoin’s market cap 5x’ed, adding $1.5 trillion. In other words, 10% of the new money supply has leaked from the fiat system into the emerging global reserve asset of Bitcoin.”
This trend, if repeated, could see BTC attract 10% of the projected $20 trillion ($2 trillion) liquidity injection. Notably, BTC has a market cap of $1.91 trillion at the time of writing, indicating that its market cap was around $382 billion as of 2022. With the expected addition of $2 trillion from the new $20 trillion money supply in 2025 and other capital inflows, BTC’s market cap could be near $5T in 2025.
Further, Coutts projected that the global money supply could peak on 26 January 2026. He concluded that the global money expansion cycle would align with bitcoin’s historical price behaviour, potentially driving it toward the forecasted highs.
Read also: Crypto market cap grows over $1T since U.S. elections.
Institutional adoption and bullish price projections
Institutional interest in BTC is expected to strengthen due to its impressive annual returns, averaging 113% historically (2009-2024). Coutts argued that bitcoin’s performance, especially during times of economic uncertainty, makes it a preferred asset class. He further noted that the increasing debasement of fiat currencies could lead to greater adoption of BTC as a global reserve asset. According to him, the growing adoption of BTC by individuals, corporations, and sovereign entities emphasizes its role as a store of value and a hedge against monetary debasement or inflation.
Moreover, crypto analysts predict BTC to reach new all-time highs above $100,000 in its next bull cycle, driven by positive market sentiment, increased liquidity and adoption. In a November report, Ryan Lee, chief analyst at Bitget Research, forecasted a potential price peak for BTC between late 2024 and mid-2025.
Lee explained, “This projection places a potential peak between late 2024 and mid-2025. Price target predictions vary significantly, but some analysts have mentioned the possibility of Bitcoin reaching $118,928 or even climbing as high as $130,000 to $150,000 by late 2025.”
Global asset manager VanEck shares an even more optimistic outlook. Their analysis predicts BTC could surpass $180,000 within the next 18 months. These bullish projections reflect growing optimism, fueled by macroeconomic factors and a potential boost from geopolitical events, such as Donald Trump’s recent U.S. presidential election victory. Notably, the global crypto market cap has surged over a whopping $1 trillion since Trump’s victory.
BTC faces short-term resistance
Despite the optimistic forecasts, BTC faces significant resistance levels in the short term. Notably, BTC reached an all-time high price of $99,645 on 22 November 2024, according to Coingecko data. Trading below $97,000 at the time of writing, CoinGlass data reveals that sellers are packed at the $98,300 price level.
Accordingly, BTC price breaking the $98,300 price mark could trigger over $1.04 billion in liquidated leveraged short positions across several crypto exchanges. However, overcoming this resistance is crucial for BTC to maintain its upward momentum and achieve its bullish target of $100,000 ahead of 2025. Bitcoin eventually broke $100,000 for the first time Thursday. This was triggered by the news of Donald Trump, the President-elect of the United States, picking Paul Atkins as the replacement for Gary Gensler.
“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,” Coutts wrote.
While short-term resistance remains a challenge, the long-term outlook for BTC appears increasingly bullish, especially with expectations of increased global liquidity. With institutional adoption rising, spot BTC exchange-traded funds (ETFs) reaching record highs and strong performance relative to traditional assets, BTC could achieve shocking price levels in the coming years. Nonetheless, leading blockchain analysis platform CryptoQuant recently discussed 5 on-chain indicators to watch for BTC’s next move.
Read also: Predictions and Analyses: Bitcoin Price before and after the US Elections
Ndianabasi Tom A Petroleum Engineering degree holder, Ndianabasi’s interest since 2018 has been studying the ever-growing field of blockchain and cryptocurrency, keenly evaluating the innovation, exploration, and expansion of this field locally and globally. The founder of Nitadel a media platform, Ndianabasi has been a Writer at Crypto Asset Buyer (CAB) since 2021. When he is not drilling resources in the blockchain and cryptocurrency field, Ndianabasi is singing, reading, watching crime movies, or playing football.
