A look behind the scenes: Why the global liquidity cycle is crucial for Bitcoin’s future and what opportunities it could create.
Developments in the crypto market are increasingly attracting investors’ attention, especially the recent price increase of Bitcoin. In the last 24 hours, the world’s most popular cryptocurrency recorded a 2.5% gain, reaching a value of approximately $84,500.
The Role of Liquidity in the Bitcoin Market
Experts agree that events like the Bitcoin halving or regulatory changes like the introduction of ETFs aren’t the only things that influence Bitcoin’s price performance. Rather, it’s the global liquidity cycle that matters. This cycle describes how money flows emerge and change in the economy.
Well-known crypto analyst TechDev emphasizes that the starting point for price movements often lies in the “red zones” of the economic cycle. These zones mark low points where a phase of increasing liquidity typically begins, which could favor Bitcoin.
Increasing Liquidity and Market Forecasts
Current forecasts indicate that the global money supply, known as M2, could rise from the current $108 trillion to approximately $127 trillion. This widespread expansion of the money supply, combined with the aforementioned return to expansionary monetary policy, could prove to be a driving force for a significant upswing in the Bitcoin market.
Geopolitical Influences and Trade Conflicts
Uncertainty in global markets, including trade tensions and conflicts, could cause short-term price volatility. Nevertheless, some experts see this as an opportunity for a long-term rise in the Bitcoin price. Adam Back, co-founder of Blockstream, points to increasing regulatory clarity and growing institutional interest in Bitcoin as positive indicators for the market’s future.
Market Analysis and Recommendations
To invest in Bitcoin in 2025, it is crucial to monitor developments in global liquidity. The close correlation between Bitcoin and the M2 money supply suggests that future price movements often coincide with these changes in liquidity. Industry analysts, such as Arthur Hayes, emphasize the important role of geopolitical tensions and monetary policy measures in creating a favorable environment for Bitcoin investors.
Conclusion: A New Era for Bitcoin?
While Bitcoin currently operates in an active and volatile market environment, increasing liquidity and institutional interest could propel the cryptocurrency into a new phase of growth. Investors should therefore be vigilant about global economic developments that could have a significant impact on the digital currency market.
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