While the crypto market eagerly anticipates Bitcoin (BTC) breaking the $100,000 price level, the premier cryptocurrency may have even more room for growth in 2025 as the global M2 money supply expands.

Global Liquidity Surge: A Catalyst For Bitcoin?

In a detailed analysis on X, Jamie Coutts, chief crypto analyst at Real Vision, brought his follower’s attention to the expansion and contraction of the global M2 money supply over the past few years. 

Coutts noted that after bottoming out at $94 trillion in Q4 2022, the global M2 money supply has risen to $105 trillion. Over the same period, Bitcoin’s market capitalization soared fivefold, from approximately $400 billion to nearly $2 trillion at the time of writing. He added:

In other words, 10% of the new money supply has leaked from the fiat system into the emerging global reserve asset of Bitcoin (gold, equities etc have absorbed new money as well). What happens if M2 expands by the usual $30T this cycle?

Notably, the global M2 money supply is projected to surge past $127 trillion in 2025 due to global liquidity concerns – an increase of more than 18% from the current $107 trillion. Assuming that 10% of this increased liquidity – about $2 trillion – is captured by BTC, the digital asset’s price could skyrocket in 2025.

To reinforce his argument, Coutts shared the following chart comparing the Federal Reserve’s balance sheet expansion, U.S. M2 money supply growth, U.S. real wage changes, and Bitcoin’s price performance. The data reveals that BTC has significantly outperformed other instruments, especially as the US dollar depreciates with increasing supply.