Latest vision Experts have revealed that Bitcoin is poised to benefit from a massive liquidity infusion expected for 2025, which could attract $2 trillion in new investments into Bitcoin.
This expectation stems from expectations that the US Federal Reserve will significantly increase the global money supply, which could boost Bitcoin’s market value and price performance.
Liquidity growth and effects of the Bitcoin market
According to Jamie Coates, senior cryptocurrency analyst at Real Vision, the global money supply, also known as M2, is expected to grow from its current value of $107 trillion to more than $127 trillion in 2025. This 18% increase in liquidity, Driven by economic factors and monetary policies, it may serve as a decisive catalyst for Bitcoin.
Coates highlights that Bitcoin has historically accounted for around 10% of newly infused liquidity, suggesting that the cryptocurrency may see significant inflows during this coming period.
Coates explained that Bitcoin’s performance is closely linked to liquidity movements in the global financial system. Historical data reveal that between the fourth quarter of 2022 and the present, the global money supply M2 has risen from $94 trillion to $105 trillion.
Global M2 bottomed at $94 trillion in Q4 2022 and has since risen to $105 trillion. During this period, Bitcoin’s market capitalization increased 5-fold, adding $1.5 trillion. In other words, 10% of the new money supply leaks out of the monetary system into the emerging global Bitcoin reserve assets (gold, stocks, etc.). pic.twitter.com/w0vWIMufbg
– Jamie Coutts CMT (@Jamie1Coutts) November 28, 2024
During the same period, Bitcoin’s market value increased fivefold, adding $1.5 trillion. These figures indicate that Bitcoin absorbed approximately 10% of the new liquidity entering the system, strengthening its role as an emerging global reserve asset.
With an expected $20 trillion in liquidity in 2025, Bitcoin could attract $2 trillion in new investments. Coates’ analysis highlights that monetary decline, coupled with Bitcoin’s outperformance annual returns exceeding 113%, will likely boost institutional adoption of the cryptocurrency.
This trend positions Bitcoin as an “increasingly attractive alternative” to traditional investment vehicles, especially as concerns persist about the strength of fiat currency.
Bitcoin 2025 Prospects and Institutional Adoption
Coates also expects the global M2 money supply to peak on January 26, 2026, as economic policies continue to expand monetary rules.
This timeline is in line with expectations that Bitcoin will reach $150,000 in 2025. This growth is expected to be supported by weak confidence in the US dollar and the broader monetary system, encouraging investors to look for alternative stores of value.
It is worth noting that institutional interest in BTC is also likely to rise as the asset shows its resilience and profitability. With its growing reputation as a hedge against inflation and monetary deterioration, Bitcoin may attract a wide range of investors seeking stability amid economic uncertainty.
Featured image created with DALL-E, chart from TradingView
Comments are closed, but trackbacks and pingbacks are open.