As the global M2 money supply reaches a record high of $55.48 trillion, Bitcoin may target $170,000.
BTC prices have historically lagged behind M2 breakthroughs, and past patterns suggest an upcoming rise.
The weakening dollar adds momentum for BTC bulls, with the DXY expected to drop 10.8% in the first half of 2025.
With global liquidity (measured by the broad money supply M2) hitting a historical high of $55.48 trillion on July 2, Bitcoin (BTC) may be moving towards a target of $170,000.
M2 aggregates dollar-adjusted liquidity from the United States, Eurozone, Japan, the United Kingdom, and Canada.
When M2 rises, it indicates that more money is circulating in the economy, including bank accounts, checking deposits, and other liquid assets. This excess liquidity may increase capital flowing into "risk assets" like cryptocurrencies.
Historically, Bitcoin has followed global and U.S. M2 supply with a lag of 3-6 months, especially during liquidity shifts. In some cases, such as the breakthrough of $100,000 in April 2025, the lag was only 1-2 weeks.
While BTC also rises during periods of low M2 growth, this trend is often difficult to sustain.
In contrast, M2-driven increases tend to produce longer and more stable upward trends, indicating that the current cycle may be supported by real liquidity rather than speculation.
Analyst Crypto Auris stated, "With the expansion of global money supply, Bitcoin's next target is around $170,000, following the flow of funds."
Due to the growing institutional demand through ETFs and corporations, several analysts predict that BTC prices will reach the range of $150,000 to $200,000 by the end of 2025.
The increase in demand for Bitcoin occurs against the backdrop of a weakening dollar.
The Dollar Index (DXY) is expected to drop 10.8% in the first half of 2025, marking the worst first-half performance since the collapse of the Bretton Woods system in 1973.
In contrast, Bitcoin rose 13.25% during the same period, reflecting a negative correlation with the dollar.
Historically, significant divergences between Bitcoin and the dollar often signal key trend reversals.
In April 2018 and March 2022, the rise of the DXY and the fall of BTC indicated a bear market. Conversely, the divergence in November 2020 marked the beginning of a significant upward trend.
In the current cycle, BTC and DXY have operated almost in sync until early 2024. A noticeable divergence began in April 2025 when the DXY fell below 100 for the first time in two years.
If past patterns repeat, this could signal the beginning of a new upward trend for Bitcoin. Continued dollar weakness may amplify this trend, exceeding Bitcoin's typical cyclical behavior.
Related: Standard Chartered expects Bitcoin (BTC) to refresh its historical high of $135,000 in the third quarter.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should conduct their own research when making decisions.
Original article: “Global M2 Money Supply Hits Record High, Bitcoin (BTC) Target Price ‘Around $170,000’”
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