China M2 supply hit a new high of 326 trillion Yuan ($44.7 trillion) at the end of the first quarter, sparking speculation that Bitcoin might soon surge in value. Many crypto analysts now believe that Bitcoin could soon surge in value.
These experts, including a crypto analytics account on X, Cryptollica, and Theya Bitcoin head of growth, Joe Consorti, point to the rising M2 and its historical correlation with BTC performance. M2 refers to cash and all liquid financial instruments and assets that can be converted to cash quickly.
Historically, an increase in M2 supply means that investors have more money at hand, and these periods tend to coincide with the rise in the value of risk assets, including Bitcoin. With its limited supply, Bitcoin remains an attractive asset for those who want a hedge against inflation.
China M2 hits a new high (Source: Chad Steingraber)
According to a report from China News, China M2 increased by 7% year over year in the first quarter of 2025. This was due to new cash injections increasing the country’s credit supply, as China saw a net injection of 249.8 billion Yuan.
Interestingly, China is not the only place where M2 is increasing. The global money supply has also increased, rising $4.5 trillion so far this year. The European Central Bank (ECB) has already cut interest rates seven times in the past year, showing that quantitative easing is a global trend.
Gold performance contributes to confidence in BTC
Meanwhile, analysts also point to the performance of Gold as a sign of what will happen to Bitcoin. While many market observers believe that BTC struggles and Gold positive gains so far this year show there is a difference between the two assets, experts disagree.
Cryptollica believes that Bitcoin will eventually copy Gold’s performance and predicts that the midterm target for BTC is $155,000. Consorti also agrees with this view, noting that BTC usually follows Gold’s trend and that there could be a 100- 150 day lag between the two.
Bitcoin v Gold price correlation (Source: Joe Consorti)
Interestingly, most experts also believe that BTC has performed well in the past few months. CoinDesk Senior Analyst James Van Straten said on X that he believes Bitcoin is still in a bull market and that the 30% pullback it experienced was expected.
However, he expressed surprise at BTC’s strong performance compared to US equities, noting that several people in traditional finance agree. He said:
“I’ve been surprised how well BTC has held up with US equity weakness. The conversations I’ve had with tradfi a lot of people have noticed this.”
His view aligns with that of Glassnode analysts, who said in The Week Onchain newsletter that Bitcoin and Gold’s performance during the trade war crisis remained impressive. Gold reached a new high during the period, while BTC dropped to $75,000 but quickly recovered to $85,000 and has remained stable.
Altcoin season incoming?
Meanwhile, many experts believe that the rising M2 supply will not only be good for Bitcoin but might also herald the much-anticipated altcoin season. Cryptollica noted that rising M2 usually marks the start of altcoin season, while crypto entrepreneur Techdev said, “Altcoins don’t run until liquidity breaks out.”
However, if altcoin season is on the way, there are no signs of it. CoinMarketCap index currently shows it is Bitcoin season. According to the chart, altcoin season starts when 75% of the top 100 tokens, excluding the stablecoins, outperform BTC in the last 90 days, but the index is currently at 19%.
Even with the widespread optimism among experts, there are still uncertainties. These include the unresolved US-China trade war, which could escalate at any moment with a devastating impact on the market.
Beyond this, the US Federal Reserve maintains a hawkish stance. Fed chair Jerome Powell says there will be no decision on interest rates until they have observed the impact of the tariffs.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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