Donald Trump

Bitcoin

<a href="https://yellow.com/asset/btc">Bitcoin</a> may re-approach the $70,000 mark if its correlation with the global money supply persists, as highlighted by an industry analyst. Joe Consorti, head of growth at Theya Bitcoin and noted Bitcoin analyst, emphasized in a November 26 post on X that this relationship has so far shown remarkable accuracy. 
Consorti <a href="https://cointelegraph.com/news/bitcoin-analyst-claims-price-correction-m2-money-supply-correlation">suggests</a> that Bitcoin might not reach $100,000 without first experiencing a market correction. "We'll have to observe whether Bitcoin follows the downward trend or stabilizes before reaching support," he noted. The correlation between Bitcoin and global M2—comprising cash and short-term bank deposits—has been evident since September 2023 with a “70-day lag,” according to Consorti. 
Historically, Bitcoin's price has moved in tandem with the M2 money supply, which often signals inflationary pressures. As M2 grows, investors gravitate towards riskier assets like Bitcoin to hedge against inflation. Consorti warns, "A continuation of this pattern could lead Bitcoin to a correction of up to 25%." 
Macroeconomist Lyn Alden underscored the connection between Bitcoin and global liquidity, noting an 83% correlation over any given 12-month cycle. Alden asserts that Bitcoin's link to M2 surpasses other asset classes. 
Despite Consorti's observations, not all experts agree. Market commentator David Quintieri argues that Bitcoin's inherent volatility makes it unsuitable for direct correlation studies, suggesting equities might offer a more realistic comparison. Meanwhile, Glassnode lead analyst James Check attributes much of the M2 decline to the strengthening US dollar, which indirectly impacts Bitcoin. 
Crypto observer Sam KB, in a recent X post, expressed surprise at Bitcoin's rally despite the M2 dip, noting discrepancies with historical cycles. 
Rumblings around the economic policies of President-elect Donald Trump are adding complexity to the forecast. Analysts caution that proposed tariffs could bolster the US dollar, traditionally putting pressure on volatile assets like Bitcoin. Hedge fund manager Scott Bessent highlighted the economic dynamics of tariffs potentially leading to a stronger dollar in a Bloomberg interview. 
As of the latest figures, Bitcoin trades at $92,856, slightly retracting after coming close to the $100,000 milestone on November 23. Informed readers are reminded that this analysis should not be considered as investment advice, and all market engagements carry inherent risks.

Bitcoin-M2 Correlation Signals Potential 20% Decline, Analysts Warn

Yellow News

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