Bitcoin surged above $100,000 this week, reaching new highs before settling slightly below that mark. Experts cite a renewed sense of optimism after news of potential US-China trade talks in Switzerland, but deeper analysis points to rising global M2 money supply as the underlying driver.
Julien Bittel, a notable macro researcher, illustrated a strong historical correlation between increasing global M2—a measure of worldwide money supply, now above $111 trillion—and subsequent Bitcoin price gains, typically with a 12-week lag. The theory is backed by past cycles where spikes in M2 were followed by significant climbs in Bitcoin's value. Other analysts, however, offer alternative perspectives. Benjamin Cowen argues that Bitcoin's movements sometimes precede changes in global liquidity, suggesting more complex causality.
Additional commentary from macro investor Raoul Pal supports the notion that as global liquidity expands, more capital flows into risk assets like Bitcoin, amplifying its macro asset status. Michael Howell of CrossBorder Capital further predicts that this liquidity expansion might continue until mid-2026—potentially supporting Bitcoin's price for the next couple of years, though a downturn may follow as liquidity peaks and tightens.
The consensus remains that monitoring global M2 and macroeconomic cycles is essential for anticipating Bitcoin's trajectory. Investors are cautioned to prepare for possible increased volatility if liquidity contracts after 2026, even as the near-term outlook remains bullish.