Analysts Predict Surge in Bitcoin Price Amid Growing M2 Money Supply

As the global M2 money supply continues to grow, analysts are speculating that Bitcoin could see a significant rally. However, despite the bullish outlook, experts are cautioning against making aggressive bets on a swift price correction in the near term.

Pav Hundal, lead analyst at Australian crypto exchange Swyftx, remains optimistic about Bitcoin’s future, particularly in the coming months. “This isn’t a market to bet your whole stash on a quick correction, but our central scenario is still for a strong March and beyond,” Hundal told.

In normal market conditions, global monetary loosening measures are often a reliable indicator of positive trends for cryptocurrencies. Hundal pointed out that the data currently suggests spot buyers are actively entering the market. Additionally, the U.S. has recently raised its debt ceiling by $4 trillion, which further supports the case for Bitcoin’s potential rise.

"Global loosening measures are a pretty reliable lead indicator for crypto," Hundal explained, adding that the year-on-year fixed exchange rate for the M2 money supply of the four major central banks reached 3.65% in January, according to MacroMicro data.

Historically, rising global M2 money supply has often led to a boost in Bitcoin prices. The increased liquidity and lower interest rates associated with a higher money supply are seen as key factors driving up demand for digital assets like Bitcoin. In fact, economist Lyn Alden noted in a September research report that Bitcoin has moved in the same direction as global M2 supply 83% of the time.

The correlation between M2 money supply and Bitcoin price movement has not gone unnoticed by other crypto analysts. One analyst, identified as bitcoindata21, posted on X on February 25, highlighting that weakness in the dollar is having a net positive effect on global M2, and suggesting that it’s only a matter of time before Bitcoin reacts to the growing money supply.

Another crypto analyst, Colin Talks Crypto, echoed this sentiment, stating in a separate post that the global M2 money supply is signaling that “a BIG MOVE is coming for Bitcoin.” Investment research account Bravo Research also weighed in, noting that the U.S. money supply has doubled in just 10 years, suggesting that this surge in liquidity could be the catalyst for a “parabolic run-up” in Bitcoin’s price.

This growing optimism around Bitcoin’s future comes amid a recent drop in its price. On February 25, Bitcoin fell below the $90,000 mark for the first time since November, following remarks by former President Donald Trump regarding the potential implementation of 25% tariffs on Canada and Mexico. Trump had earlier agreed to pause these tariffs for 30 days, but his decision to move forward with them has caused market uncertainty.

Despite this temporary setback, analysts are watching the ongoing increase in global money supply closely, with many believing that Bitcoin is poised for significant price gains as liquidity continues to rise. While caution remains in the market, the growing M2 money supply is seen as a key factor that could trigger a major rally for the cryptocurrency in the months ahead.