The price of Bitcoin is expected to benefit from the recent surge in global money supply as it reaches close to $100 trillion, while the cryptocurrency itself is trading at $71,000. According to Philip Swift, the founder of on-chain data service LookIntoBitcoin, the global supply known as M2 is reaching a historic high, which historically correlates with Bitcoin price movements. The current M2 of $94 trillion is significantly higher than what was observed in late 2021 when Bitcoin hit its previous all-time high of $69,000, representing a $3 trillion increase.
Moreover, M2 has rebounded by 10% since dipping to $85 trillion in late 2022, coinciding with the depths of the crypto bear market. This aligns with other liquidity-based analyses that project a bullish outlook for Bitcoin. The relationship between Bitcoin and the U.S. M1 money supply is also worth noting, as it is breaking out of a seven-year consolidation period, hinting at significant room for growth. Institutional investors are increasingly diversifying their portfolios by investing in cryptocurrency products, with $15 billion of inflows year-to-date, predominantly in products offering exposure to BTC.
In the week following the U.S. Securities and Exchange Commission (SEC) clearing the path for spot Ether exchange-traded funds (ETFs) in the country, there was $33.5 million of inflows into products offering exposure to Ethereum’s ETH, bringing the year-to-date flows to $11 million. Products focusing on Solana ($SOL) saw $5.8 million worth of inflows, while those with exposure to multiple digital assets saw $2.7 million of outflows last week. Overall, cryptocurrency investments are gaining traction among institutional investors, signaling a positive outlook for Bitcoin and other digital assets in the market.
As the global money supply continues to grow, Bitcoin is positioned to benefit from the increased liquidity in the market. The current M2 of $94 trillion is significantly higher than previous levels, indicating a potential price increase for Bitcoin. Institutional investors are increasingly looking to diversify their portfolios by investing in cryptocurrency products, with Bitcoin being a popular choice. The recent surge in global money supply has historically been correlated with Bitcoin price movements, pointing towards a positive trend for the flagship cryptocurrency in the near future.
Furthermore, the relationship between Bitcoin and the U.S. M1 money supply breaking out of a long consolidation period suggests significant growth potential for the cryptocurrency. With institutional investors showing interest in digital assets, particularly Bitcoin, Ethereum, and Solana, the market for cryptocurrency investments is gaining momentum. As more investors look to diversify their portfolios and capitalize on the growth potential of digital assets, Bitcoin is expected to continue its upward trajectory in price. The positive correlation between global liquidity and Bitcoin price movements further supports the bullish outlook for the cryptocurrency.
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