Recent analyses by crypto experts acknowledge that Bitcoin (BTC) price movements closely correlate with the global M2 money supply. Based on this, they predict potential bullish momentum for the crypto market in late March.

With global liquidity expanding, analysts predict that Bitcoin and other digital assets could experience a significant rally, starting around March 25, 2025, and potentially lasting until mid-May.

Global M2 and Its Influence on Bitcoin

The M2 money supply represents a broad measure of liquidity, including cash, checking deposits, and easily convertible near-money assets. Historically, Bitcoin has demonstrated a strong correlation with M2 fluctuations, as increased liquidity in financial markets often drives demand for alternative assets like cryptocurrencies.

Colin Talks Crypto, an analyst on X (Twitter), highlighted this correlation, pointing to a sharp increase in global M2. He described it as a “vertical line” on the chart, signaling an imminent surge in asset prices.

According to his prediction, the rally for stocks, Bitcoin, and the broader crypto market is expected to commence on March 25, 2025, and extend until May 14, 2025.

“The Global M2 Money Supply chart just printed another vertical line. The rally for stocks, Bitcoin, and crypto is going to be epic,” he suggested.

Vandell, co-founder of Black Swan Capitalist, supports that global M2 movements directly influence Bitcoin’s price. He notes that declines in global M2 are typically followed by Bitcoin and cryptocurrency market downturns about ten weeks later.

Despite the potential for short-term dips, Vandell believes this cycle sets the stage for a long-term uptrend.

“As seen recently, when global M2 declined, Bitcoin & crypto followed roughly 10 weeks later. While further downside is possible, this drawdown is a natural part of the cycle. This liquidity shift will likely continue throughout the year, setting the stage for the next leg up,” Vandell explained.

Similarly, another popular analyst, Michaël van de Poppe, sees M2 expansion as one of five key indicators for an early market recovery. He emphasizes that with inflation no longer the primary focus and expectations of US Federal Reserve rate cuts, financial conditions are becoming more favorable for Bitcoin.

“Bottom line is: Inflation isn’t the prime topic, likely to go down. FED rate cuts. The dollar to weaken massively. Yields to fall. M2 Supply to significantly expand. And as this process started, it’s just a matter of time until altcoins and crypto pick up. Bull,” he stated.

Historical Context and Projections

The correlation between Bitcoin’s price and global M2 growth is not new. Tomas, a macroeconomist, recently compared previous market cycles, particularly in 2017 and 2020. At the time, significant increases in global M2 coincided with Bitcoin’s strongest annual performances.

“Money supply is expanding globally. The last two major global M2 surges occurred in 2017 and 2020—both coincided with mini ‘everything bubbles’ and Bitcoin’s strongest years. Could we see a repeat in 2025? It depends on whether the U.S. dollar weakens significantly,” Tomas observed.

Tomas also highlighted the impact of central bank policies, pointing out that while major banks are cutting rates, the strength of the US dollar could be a limiting factor. If the dollar index (DXY) drops to around 100 or lower, it could create conditions similar to previous Bitcoin bull runs.

The Federal Reserve’s Role

Macro researcher Yimin Xu believes that the Federal Reserve might halt its Quantitative Tightening (QT) policies in the latter half of the year. Such a move, Yimin says, could potentially shift toward Quantitative Easing (QE) if economic conditions demand it. This shift could inject additional liquidity into the markets, fueling Bitcoin’s upward trajectory.

“I think reserves could get too thin for the Fed’s liking in the second half of the year. I predict they will terminate QT in late Q3 or Q4, with possible QE to come after,” Xu commented.

Tomas agreed, stating that the Federal Reserve’s current plan is to increase its balance sheet slowly, which is in line with GDP growth. He also articulates that a major financial event could trigger a full-scale return to QE.

These perspectives suggest that uncertainties remain, including the strength of the US dollar and potential economic shocks. Nevertheless, the broader consensus among analysts points toward an impending bullish phase for Bitcoin.

Investors must conduct their own research as they continue to watch macroeconomic indicators in the coming months, anticipating whether the predicted rally will materialize.

Once viewed as a hedge against financial uncertainty, Bitcoin (BTC) struggles to maintain this title amid global economic shifts. Its market trajectory increasingly resembles that of traditional risk assets.

Since Donald Trump’s inauguration on January 20, the crypto market has seen an unprecedented decline, erasing nearly $1 trillion in value.

Bitcoin’s Changing Role in Financial Markets

Historically, Bitcoin has been considered a hedge, moving in tandem with gold during times of uncertainty. However, this trend has reversed since President Trump took office. While gold continues to rise, Bitcoin has undergone a severe correction, suggesting a fundamental shift in market perception.

“Since Trump became president on January 20, the market has dropped from $3.7 trillion to $2.5 trillion. This is strange cause the moment Trump took office marked a local top for crypto Even though he is the most pro-crypto president ever,” noted crypto analyst Symbiote.

One key factor in this change is Bitcoin’s growing correlation with traditional financial assets. In 2024, BTC moved in synchrony with the Nasdaq 100 and S&P 500 approximately 88% of the time, a stark contrast from its earlier role as a negative-correlated asset.

Now, the 30-day rolling correlation has dropped to around 40%. This suggests Bitcoin is now trading more like a high-risk technology stock than a hedge against inflation or economic turmoil.

Liquidity is another major concern. Since 2020, financial markets have been pricing in reduced liquidity, a trend severely affecting crypto. Market watchers note that liquidity flows back into the US dollar, which was historically the most stable asset during trade wars.

This shift has resulted in repeated flash crashes in crypto markets, increasing volatility and investor uncertainty. Coinglass data supports this trend, showing that Bitcoin ETF (Exchange-Traded Funds) assets under management (AUM) have dropped from $120 billion to $100 billion in weeks.

Additionally, decentralized finance (DeFi) has taken a hit. Data on DefiLlama shows the total locked value (TVL) dropping from the 2025 peak of $128.7 billion to $93.2 billion as of this writing. The decline signals a broad loss of confidence in crypto’s ability to provide financial stability during economic uncertainty.

Trump’s Trade War Fears Weigh on Crypto Sentiment

A recent Bank of America survey highlights growing fears about global trade wars. Specifically, 42% of respondents identified it as the most bearish development for risk assets in 2025, up from 30% in January.

“When asked which global development would be seen as the most bearish for risk assets in 2025, 42% said a global trade war, primarily due to the new Trump administration’s threats of new tariffs. That response is up from 30% that replied in January that a global trade war would be the most bearish,” Pensions & Investments reported.

Notably, only 3% of respondents believe Bitcoin would perform best in a full-blown trade war, starkly contrasting gold and the US dollar. These findings highlight a critical shift in perception—markets no longer see Bitcoin as a hedge in times of economic strife.

The pioneer crypto, which thrived during geopolitical instability, is now seen as too volatile to offer meaningful protection against financial shocks.

Furthermore, Goldman Sachs’ volatility panic index has surged from 1.4 in December to over 9.1, with expectations of even greater swings ahead. The Kobeissi Letter, a widely followed financial news source, suggests that Bitcoin’s price action will likely remain turbulent as trade war fears intensify.

Is There Hope for Bitcoin’s Revival? Experts Weigh In

Despite the bearish sentiment, some experts argue that Bitcoin still holds long-term potential. BeInCrypto recently reported how Bitcoin could serve as America’s financial lifeline amid soaring national debt. By embracing digital assets as part of a broader economic strategy, the US could leverage Bitcoin’s decentralized nature to maintain financial resilience.

“You can buy Bitcoin though as a way to vote with your dollars, send a clear message, and potentially even save the US long term. A return to the gold standard,” Coinbase CEO Brian Armstrong said.

Additionally, Bitcoin’s ability to provide liquidity to struggling companies remains a strong argument in its favor. BeInCrypto highlighted how firms looking to boost their stock performance have increasingly turned to Bitcoin as an alternative asset.

“We have a nice core business, but it’s too small to be relevant to the capital markets. I think as we start investing more into our Bitcoin treasury strategy, we’ll be able to create more liquidity in our stock and attract investors,” Bloomberg reported, citing Goodfood CEO Jonathan Ferrari.

If corporate adoption continues to grow, Bitcoin could regain its position as a critical financial tool rather than just another risk asset. Nevertheless, one idea is proving apparent: Bitcoin’s role in global finance is changing.

“I get the rationale for a Bitcoin reserve. I do not agree with it, but I get it. We have a gold reserve. Bitcoin is digital gold, which is better than analog gold,” BTC critic Peter Schiff admitted recently.

Bitcoin turns bearish as its weekend gains completely evaporate. Negative momentum was briefly halted thanks to Trump’s Crypto Reserve announcement, but the underlying macroeconomic problems remain.

Trump’s tariffs against its closest trading partners are still set to go through, and the Federal Reserve is predicting the worst decline in US GDP since the pandemic began. A broader recession will also hurt the crypto industry.

Bitcoin Drops 10% As Recession Seems Near

The price of Bitcoin has shown extreme volatility over the past few days. Last week, the Crypto Fear and Greed Index hit its lowest level since 2022, and Bitcoin looked very bearish due to several key factors.

Yesterday, Trump announced a crypto reserve that caused token prices to pump. However, that forward momentum has completely vanished today.

There are a few reasons that Bitcoin is looking so bearish right now. Essentially, Trump’s announcement may have only slapped a bandage on a very serious wound.

Last week, Bitcoin ETFs had their worst week ever, with $2.7 billion in outflows, as the Federal Reserve Bank of Atlanta predicted a 1.5% GDP decrease. Today, it has become even more pessimistic.

The Fed is now predicting that the US GDP will shrink 2.8% by the end of Q1 2025. From an economic perspective, this is apocalyptic compared to its predictions four weeks ago, which showed 3.9% growth.

Macroeconomic Factors Don’t Look Good for Crypto

The US economy hasn’t shrunk that much since the early days of the Covid-19 pandemic five years ago. These macroeconomic factors are a significant signal that Bitcoin might turn bearish in the short term. In fact, market liquidations have hit nearly $800 million today.

Another important factor contributing to Bitcoin’s volatility is President Trump’s proposed tariffs. Some analysts have theorized that they aren’t the main cause, and that’s probably true.

However, the crypto market crashed when Trump recently announced 25% tariffs on the EU, joining ones on Canada, Mexico, and China.

“Trump: no room left for deal on tariffs on Mexico, Canada. [He] reiterates plan to double China tariff from 10% to 20%,” claimed Walter Bloomberg via social media.

In other words, macroeconomic factors are largely driving market sentiment in the crypto industry. Since the Bitcoin ETFs were approved, crypto has been well-integrated into traditional finance.

If the US economy enters a recession, however, the downsides of that integration will fully reveal themselves.