Bitcoin’s price is currently facing downward pressure, yet evolving macroeconomic trends and shifting regulatory attitudes may fuel its future growth. Many analysts believe Bitcoin could once again reach six-figure price levels in the near future.
Since hitting a low of $76,703 on March 11, Bitcoin’s price has increased by 8%, driven partly by large investors using leverage to buy during the dip.
On Bitfinex, long margin positions have surged to their highest levels since November 2024, increasing by 13,787 BTC over 17 days. Valued at approximately $5.7 billion, these leveraged bullish positions indicate strong confidence among major investors in Bitcoin’s upward potential, despite recent price weakness.
Macro Liquidity and Bitcoin’s Price Correlation
Many market observers argue that Bitcoin’s price is closely tied to global monetary expansion. When central banks increase liquidity, Bitcoin often benefits and appreciates in value.
With rising recession risks, the likelihood of expansionary monetary policies is also increasing. If this correlation holds, large investors on Bitfinex may be well-positioned to profit from a Bitcoin rally beyond $105,000 in the coming months.
For example, one analyst on X (formerly Twitter), pakpakchicken, claims to have identified an 82% correlation between global M2 money supply and Bitcoin’s price.
When central banks tighten liquidity—by raising interest rates or selling bonds—traders often become more risk-averse, reducing demand for Bitcoin. Conversely, periods of monetary easing tend to boost investor interest in digital assets, increasing their price potential.
Large Investors Accumulate as M2 Bottomed
In early September 2024, margin traders on Bitfinex increased their long Bitcoin positions by 7,840 BTC, even as the market remained bearish. At the time, Bitcoin had struggled for over three months to reclaim the $50,000 level.
Despite the downturn, these major investors held their positions. Less than two months later, Bitcoin’s price surged beyond $75,000. Notably, this accumulation occurred just as global M2 money supply reached a bottom, reinforcing the perceived correlation between liquidity conditions and Bitcoin demand.
While it may be difficult to prove a direct causal link between money supply growth and Bitcoin accumulation—especially given the impact of major events—the pattern remains compelling.
For instance, Donald Trump’s election as U.S. President in November 2024 significantly boosted Bitcoin’s rally due to his administration’s pro-crypto stance, independent of global M2 trends.
Similarly, Michael Saylor’s recent plans to raise up to $21 billion for MicroStrategy to acquire more Bitcoin could shift market dynamics, even as Bitcoin spot ETFs have seen $4.1 billion in net outflows since February 24.
MicroStrategy remains the largest corporate holder of Bitcoin, with 499,096 BTC acquired at a total cost of $33.1 billion, reinforcing its long-term bullish strategy.
Evolving Crypto Regulation and Market Impact
While global money supply expansion may have influenced the rise in margin long positions on Bitfinex, Bitcoin’s potential run toward $105,000 could be driven largely by industry-specific developments and regulatory shifts.
A March 13 Wall Street Journal report revealed that representatives of former President Trump have discussed potentially acquiring a stake in Binance.
So far, the U.S. government’s more crypto-friendly stance has yet to deliver tangible market benefits. For example, the Office of the Comptroller of the Currency (OCC) has not yet clarified whether banks can custody digital assets or manage stablecoins without prior approval.
Similarly, SEC Acting Chairman Mark Uyeda announced plans to remove crypto-related provisions from a proposed rule that aimed to expand the definition of an exchange.
The SEC is also currently reviewing applications from Bitcoin spot ETF issuers seeking permission to allow in-kind creations and redemptions. This would enable shares to be exchanged directly for Bitcoin, rather than through traditional cash transactions.
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Macroeconomic Pressures and Future Stimulus
Global macroeconomic conditions have recently deteriorated, placing downward pressure on Bitcoin’s price. However, these same factors are gradually pushing governments toward economic stimulus measures and expansion of the M2 money supply.
If this trend continues, it may eventually create favorable conditions for Bitcoin to reach the $105,000 level predicted by pakpakchicken by May 2025—or possibly even higher.
Frequently Asked Questions
How does global money supply affect Bitcoin’s price?
When central banks increase the money supply (M2), more liquidity enters the financial system. This often leads investors to seek alternative stores of value like Bitcoin, potentially driving its price upward.
What is driving large investors to increase long positions?
Institutional players are accumulating Bitcoin in anticipation of both macroeconomic liquidity injections and positive regulatory developments. Many see current prices as a buying opportunity before expected rallies.
Could regulatory changes really push Bitcoin to $105,000?
While not guaranteed, clearer regulations—such as approved in-kind ETF redemptions or banking integration—could significantly improve market structure and investor confidence, supporting higher valuations.
This article is for general information purposes only and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of any affiliated institutions.