Rising Money Supply Signals Bitcoin Rally Resurgence

The increasing supply of the M2 money aggregate may indicate an imminent market reversal and a shift to exponential growth for Bitcoin, experts suggest.

According to reports from the analytical project Bravos Research, Bitcoin’s chart “looks parabolic,” even though the asset’s capitalization is only about $2 trillion.

The US money supply has doubled in just 10 years

This liquidity surge could fuel Bitcoin’s parabolic run-up

If Bitcoin reached gold’s market cap, it would hit $1 million

Is this really possible?

A thread ? pic.twitter.com/hEACXMJ1Vz

— Bravos Research (@bravosresearch) February 24, 2025

Specialists emphasized that to achieve figures similar to the $20 trillion gold market, Bitcoin’s price would need to be around $1 million. With the growth of the US dollar money supply, corresponding capital inflows are quite possible, they believe.

Analysts noted that over the past 10 years, the USD supply has increased by $1 trillion annually. This has triggered growth in the stock, gold, and real estate markets.

“If even a portion of this money flows into Bitcoin instead of traditional assets, the result could be explosive growth,” experts suggested.

In their view, the market situation is similar to conditions in 2017, when “after a couple of years of slowing growth, Trump’s policies revived economic activity,” spurring Bitcoin’s rise.

By the end of 2024, Bitcoin had already broken key resistance levels, and in a strong economy, bullish sentiment in the Bitcoin market will persist, according to Bravos Research.

Similar conclusions were reached by crypto analyst known as bitcoindata21.

Global M2 (shifted forward by 30 days) vs Bitcoin

With weakness in the dollar causing a net positive effect on Global M2, just a matter of time hopefully before Bitcoin realises. pic.twitter.com/saO7xRpsYP

— bitcoindata21 (@bitcoindata21) February 25, 2025

“Since the weakness of the dollar has a net positive impact on M2, hopefully, it’s just a matter of time before this effect is realized in Bitcoin,” he noted.

According to research by economist Lyn Alden, historically, the dynamics of the first cryptocurrency coincided with M2 trends in 83.2% of cases.

QCP’s Counterarguments

Conversely, QCP analysts pointed to increasing uncertainty:

“The global risk-off has led to a decline in stocks, gold, and Bitcoin, while rumors of stagflation are gaining momentum.”

In their observations, the first cryptocurrency trades in line with risk assets, and outflows from ETFs indicate a lack of confidence.

“In volatile markets, digital assets are first in line for liquidation when traders rush to cut risks,” QCP experts warned.

The cryptocurrency fear and greed index has dropped to 21, signaling “extreme fear.” This is a record low since August 2024.

At the time of writing, Bitcoin is trading at $89,000, falling below $90,000 for the first time since November 2024. Its capitalization stands at $1.77 trillion.

According to Binance CEO Richard Teng, the downturn in the crypto market is temporary and will not last long.