Bitcoin is holding close to $120,000, and traders are contemplating its potential to reach new highs in 2025. Let's examine the key factors that could contribute to this.
Surge in Money Supply
Global liquidity is hitting record levels. In July, the M2 money supply among the 21 largest central banks reached $55.5 trillion. The U.S. alone has run a $1.3 trillion budget deficit in nine months.
Such an expansion of money supply often drives investors toward hard assets like Bitcoin.
Bitcoin ETFs vs. Gold
Spot Bitcoin ETFs in the U.S. now hold $150 billion in assets compared to gold's $198 billion. If Bitcoin ETFs surpass gold, it would mark a significant milestone indicating BTC is becoming a serious reserve option for big investors.
Retirement Fund Inflows
This week, U.S. President Donald Trump signed an executive order allowing cryptocurrencies and other alternative assets in 401(k) retirement accounts. According to Michael Heinrich, this could unlock trillions in retirement capital for Bitcoin and other compliant assets. The U.S. retirement pool is valued at around $12 trillion.
Bitcoin faces challenges, but the setup is hard to ignore. With record money supply, ETFs nearing gold, and the potential influx of retirement capital, 2025 could be one of Bitcoin's strongest years yet.
