Bitcoin is making headlines again as it eyes the $130K mark, fueled by a combination of geopolitical stability, monetary policy shifts, and strong institutional demand. Could this be the start of a new bull run? Let’s break down the key factors driving Bitcoin’s momentum.
U.S.-EU Trade Pact: A Bullish Catalyst for Bitcoin
The recent U.S.-EU trade deal has been flagged as a significant development, reducing geopolitical risks and fostering economic stability. Analysts suggest this could boost risk-on sentiment, indirectly benefiting Bitcoin. Here’s why:
- Reduced trade tensions between major economies
- Increased institutional confidence in global markets
- Potential for higher liquidity flows into risk assets like Bitcoin
M2 Money Supply Surge: Fueling Bitcoin’s Rally
Bitcoin has historically correlated with expansions in the M2 money supply. Recent data shows a 2.3% year-to-date increase, with a 0.63% surge in June—the largest monthly jump in 2025. Key takeaways:
- M2 growth often precedes Bitcoin rallies by 60-90 days
- 2020’s liquidity surge drove an 800% Bitcoin rally
- Current trends suggest a potential 15-17.5% rise to $130K
FOMC Outlook: Hawkish Rhetoric vs. Liquidity Expansion
The upcoming FOMC meeting adds uncertainty, but analysts note a disconnect between the Fed’s hawkish stance and its liquidity expansion. Key points:
- Only a 5% probability of a rate cut
- Speculation about future quantitative easing
- Bitcoin’s sensitivity to monetary policy shifts could play a role
Institutional Demand: The Hidden Force Behind Bitcoin’s Rise
Strong ETF inflows and whale accumulation suggest sustained institutional interest. Highlights:
- ETF inflows consistently outpace Bitcoin’s daily issuance
- Entities like BlackRock are absorbing supply
- Long-term whale wallets remain inactive, signaling accumulation
The convergence of these factors—geopolitical stability, monetary expansion, and institutional demand—creates a compelling case for Bitcoin’s upward trajectory. While short-term volatility is expected, the long-term outlook remains bullish.
Frequently Asked Questions (FAQs)
What is driving Bitcoin’s price toward $130K?
Key factors include the U.S.-EU trade pact, M2 money supply growth, institutional demand, and the FOMC’s monetary policy outlook.
How does the M2 money supply affect Bitcoin?
Bitcoin often rallies 60-90 days after M2 expansions, as seen in 2020 when liquidity surges drove an 800% price increase.
What role do institutions play in Bitcoin’s current rally?
Institutions like BlackRock are absorbing supply through ETFs, while long-term whale wallets remain inactive, signaling accumulation.
Could the FOMC meeting impact Bitcoin’s price?
Yes, Bitcoin is sensitive to monetary policy shifts. Even with a hawkish stance, liquidity expansion could support further gains.
