Originally published on: November 27, 2024
Analysts are predicting a bullish Bitcoin rally in 2025, with expectations of the cryptocurrency reaching over six figures, fueled by the weakening US dollar and growing global money supply.
Bitcoin came close to hitting an all-time high of $100,000 on Nov. 22, but experienced a slight correction shortly after. Despite this, experts suggest that Bitcoin could see a significant increase in value, potentially retracing up to 30% before the anticipated rally in 2025.
According to Jamie Coutts, chief crypto analyst at Real Vision, the US Dollar Index (DXY) and the M2 money supply play crucial roles in Bitcoin’s future price movements. Coutts emphasizes the historic correlation between the M2 money supply and Bitcoin price, suggesting that the positive growth of the global money supply could push Bitcoin’s price to over $132,000 next year.
The potential decline in the US dollar and the continued increase in the global money supply, fueled by liquidity injections from the US Federal Reserve, are key factors driving Bitcoin’s projected rally. With the Fed expected to inject over $127 trillion into the global money supply in 2025, up from the current $107 trillion, Bitcoin is poised to benefit from this liquidity surge.
While the weakening US dollar and growing money supply are significant drivers of Bitcoin’s price, other factors such as political events and corporate investments also play a role. The recent victory of Donald Trump in the US presidential election and companies like MicroStrategy continuing to invest in Bitcoin are expected to further boost the cryptocurrency market in 2025.
Additionally, Bitcoin’s increasing adoption, as evidenced by nearing one million daily active addresses, suggests a positive outlook for the cryptocurrency’s future. This growing adoption could contribute to more upward momentum in Bitcoin’s price trajectory.
As the crypto market prepares for the anticipated rally in 2025, investors are closely watching the interplay between the US dollar, global money supply, and various other factors that could shape Bitcoin’s future price movements. Stay informed with the latest developments in the Finance Redefined newsletter for expert insights and analysis on the evolving DeFi landscape and financial opportunities.