A Historic Liquidity Wave
In early 2025, the global M2 money supply has expanded by an unprecedented $4.5 trillion, bringing the total to approximately $123 trillion. This surge, driven by central banks’ efforts to stimulate economies amid global uncertainties, has major implications for financial markets—especially for crypto.
Bitcoin’s Response to Increased Liquidity
Historically, Bitcoin’s price shows a strong correlation with the M2 money supply, often with a 60-day lag. As global liquidity increases, investors turn to assets like Bitcoin seen as a hedge against inflation because of its fixed supply of 21 million coins.In April 2025, Bitcoin’s price hit $84,000, a 2.3% rise in a single day. Trading volume for the BTC/USD pair surged 35% compared to the previous day.
Technical Indicators and Market Sentiment
Technical analysis is backing up the bullish vibe. Bitcoin’s Relative Strength Index (RSI) is up to 72, showing strong buy pressure. The MACD (Moving Average Convergence Divergence) also just flipped bullish, signaling more positive momentum ahead.
Analysts now predict that if this trend continues, Bitcoin could smash new all-time highs and some targets even call for $108,000 by June 2025.
Ripple Effect Across Markets
This isn’t just about crypto. With the global money supply surging, traditional markets like equities and bonds are seeing new volatility. Investors everywhere are watching central bank moves and economic data to figure out where the next big shift will land.
Final Take
The record-breaking increase in global money supply in 2025 has created the perfect storm for a crypto rally. Investors are seeking protection from inflation, and Bitcoin—with its fixed supply and decentralized ethos—is in the spotlight. While there’s always short-term chop, the big picture for Bitcoin and crypto remains bullish as long as central banks keep the cash flowing.
