Originally published on: November 27, 2024
Bitcoin’s price could plummet by 20% if it continues to move in tandem with the M2 money supply, according to industry analysts. The correlation between Bitcoin and global money supply has been remarkably accurate, with Bitcoin showing a 70-day lag behind M2 since September 2023.
Joe Consorti, head of growth at Theya Bitcoin and BitcoinBTC analyst, pointed out this correlation in a recent Xpost. He noted that historically, Bitcoin has followed the M2 money supply growth during previous bull runs, as investors often turn to riskier assets like Bitcoin to hedge against inflation.
While some analysts, like macroeconomist Lyn Alden, believe in the strong correlation between Bitcoin and M2, others, like market commentator David Quintieri, dismiss it as too volatile to track against anything. This debate raises questions about the future of Bitcoin’s price trajectory.
In a recent analysis, Glassnode lead analyst James Checks suggested that the decline in M2 could be attributed to the strength of the US dollar, potentially impacting Bitcoin’s price movement in the near future.
With the looming threat of President-elect Donald Trump’s tariffs on imported goods strengthening the US dollar, some investors fear the consequences for riskier assets like Bitcoin. The current trading price of Bitcoin hovering around $91,988 adds to the uncertainty of whether the cryptocurrency will reach the coveted $100,000 milestone.
While analysts may differ in their predictions for Bitcoin’s future, it’s essential for investors to conduct their own research and make informed decisions. Stay tuned for more insights on Bitcoin’s price movement by subscribing to our Markets Outlook newsletter for valuable investment tips and trading strategies.