Bitcoin Set for Explosive Growth as Dollar Weakens

Bitcoin is on the verge of a potential surge in just three weeks, thanks to shifting global liquidity trends that appear to favor cryptocurrency and other high-risk investments.

Recent analysis by Andre Dragosch, who leads research at the asset management firm Bitwise, suggests that the world’s money supply is set to reach unprecedented levels.

Counting Down to Bitcoin's Price Revival

A fresh wave of support for Bitcoin (BTC) is emerging as the strength of the US dollar plummets to its lowest point since early November 2022.

Data from Cointelegraph Markets Pro and TradingView indicates that the US Dollar Index (DXY), which evaluates the dollar's performance against a group of other currencies, is poised to dip below 104. This development is significant, as it could signal a shift in market dynamics.

For Dragosch, the interpretation is straightforward. He stated, "If this trend continues, the global money supply will soon hit all-time highs," remarking on the DXY being the "most bullish chart you will see today." He added, "You know what that means for BTC…"

US Dollar Index (DXY) 1-day chart. Source: Cointelegraph/TradingView

The dollar has yet to see substantial benefits due to the new US administration's policies, and ongoing trade tariffs are further dampening enthusiasm for riskier assets.

Colin Talks Crypto, another market analyst, has also highlighted the increasing M2 money supply as a key indicator for a possible Bitcoin breakout. As previously reported, Bitcoin's price movements have shown high sensitivity to the patterns in global liquidity, with bullish phases often correlating to expansion periods in the money supply.

This week, Colin Talks Crypto reassured followers on X that the impending rally in stocks, Bitcoin, and cryptocurrencies would be phenomenal. He estimated, "March 25th is the approximate date" for a noteworthy increase.

Comparison of risk assets vs. global M2 money supply. Source: Colin Talks Crypto/X

Strong Odds for a US Bitcoin Reserve

Bitcoin and altcoins could receive an additional boost sooner than expected, as impactful developments may soon unfold.

On March 7, an important event will take place at the White House, where US President Donald Trump will host the first-ever Crypto Summit. Commerce Secretary Howard Lutnick has hinted that this meeting could bring confirmation regarding a strategic Bitcoin reserve.

However, some reports suggest that the establishment of such a reserve may face delays due to limited support in Congress. Yet, veteran participants in the crypto space remain optimistic that a Bitcoin reserve is inevitable.

Anthony Pompliano, the founder and CEO of Professional Capital Management, summarized on X, "The Strategic Bitcoin Reserve is coming. Everyone wants digital sound money."

In a market note dated March 5, Matt Hougan, the chief investment officer at Bitwise, predicted that this reserve would exclusively consist of Bitcoin.

Latest insights from prediction service Kalshi suggest there is now a 71% chance of a Bitcoin reserve being established this year, marking the highest odds to date.

This article should not be construed as investment advice or recommendations. All investment and trading activities come with risks, and readers are encouraged to conduct thorough research before making any financial decisions.

Bitcoin, Dollar, Market