The market of Bitcoin is entering a key phase known as the “parabolic phase”a period of rapid growth that marks significant milestones in its price.
According to various analysts, this cryptocurrency could reach a local maximum of $110,000 before the end of January 2025, driven by factors such as increasing global liquidity, expanding M2 money supply and a favorable macroeconomic environment.
The rise of the parabolic cycle
Raoul Pal, CEO of Global Macro Investor, argues that the price of Bitcoin closely tracks the Total Liquidity Index, an indicator that reflects the combined balance sheets of the world’s major central banks. According to their analysis, this index points to a peak close to $110,000 in January 2025, followed by a correction below the $70,000 in February.
However, this correction would be temporary, as global liquidity is expected to continue growing through the third quarter of 2025. Historically, money supply growth has been a catalyst for the price of Bitcoin, attracting capital from new investors.
The role of M2 money supply
The expansion of the M2 money supply, a key indicator of money in circulation, is playing a crucial role in this cycle. According to Alvin Kan, COO of Bitget Wallet, economic stimulus policies, such as those implemented by the US Federal Reserve, often improve conditions for risk assets, including Bitcoin. This, combined with growing investor confidence, could attract up to 2 trillion dollars in new investments during 2025.
Furthermore, analyst Jamie Coutts of Real Vision suggests that the price of Bitcoin could surpass the $132,000 in 2025, highlighting the correlation between the growth of liquidity and the appreciation of the cryptocurrency. Although Bitcoin cycles are inherently volatile, analysts are confident of sustained long-term growth.
Macroeconomic and political factors
The political environment could also play a determining role. Donald Trump’s victory in the US presidential election has sparked renewed interest in risk assets, including Bitcoin and other cryptocurrencies. According to Bitfinex analysts, a crypto-friendly administration could pave the way for an extended rally, accompanied by a clearer and more beneficial regulatory framework for the industry.
The possibility has even been raised that the US government might consider a Bitcoin strategic reservewhich could push the price towards record levels. Blockstream Co-Founder Adam Back Suggests This Could Drive Bitcoin Price 1 million dollars in the future. Others are more cautious and predict a value of $250,000.
Despite optimistic projections, the Bitcoin market is not without risks. Corrections are inevitable, and the market will continue to be volatile, influenced by geopolitical events, changes in monetary policies and the behavior of institutional investors.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
