Analysts from Bernstein predict that Bitcoin’s price could reach $200,000 by the end of 2025, a nearly 200% increase from its current level of around $68,000. This forecast is based on the anticipated influx of capital into Bitcoin, particularly from spot Bitcoin ETFs.
Growth of the Global Money Supply
According to data from the U.S. Federal Reserve, the U.S. M2 money supply reached approximately $21.2 trillion in September 2024. Projections indicate that the global money supply could reach $20 trillion by 2025, generating significant liquidity within the financial system.
Bitcoin Attracting New Capital
With the growing money supply, Bitcoin could attract approximately $2 trillion from this new liquidity, equivalent to 10% of the total new supply. This growth is driven by:
- Institutional Adoption: Spot Bitcoin ETFs and participation from major institutions like BlackRock and Fidelity have enhanced Bitcoin’s legitimacy and appeal to investors.
- Crypto-Friendly Policies: Donald Trump’s projected victory in the 2024 election is expected to create a more favorable regulatory environment for cryptocurrencies, boosting broader adoption.
Impact on the Crypto Market
If Bitcoin successfully attracts $2 trillion from the new money supply, its market capitalization could rise significantly, cementing its position as a leading digital asset and potentially pushing its price to new record highs.
However, investors should exercise caution as the cryptocurrency market remains highly volatile and influenced by various economic and political factors.