Crypto analyst Kyle Chassé argues that Bitcoin is undervalued based on rising global liquidity, setting a potential target of $270,000. He points out that the global M2 money supply has reached a record $98 trillion, growing at its fastest pace since 2020, largely due to aggressive monetary expansion in the U.S., Eurozone, China, and Japan.
Chassé suggests that in a system where fiat currencies are being steadily diluted, fixed-supply assets like Bitcoin aren’t simply rising in price—cash is losing its value. He views Bitcoin as a hedge against this currency debasement. His comments come as major fiat currencies, including the U.S. dollar and the Japanese yen, have weakened this year amid increased government spending, a trend often seen as bullish for Bitcoin due to its capped supply.
Other analysts, like BitMEX co-founder Arthur Hayes, have also predicted that increased dollar liquidity would boost Bitcoin’s price. However, Bitcoin has recently behaved more like a risk asset, erasing its year-to-date gains amid U.S. political tensions and the threat of a government shutdown, briefly dropping below $87,000.
Another analyst, Merlijn, believes Bitcoin will rally once liquidity returns to the market. He notes that Bitcoin appears to be completing a pattern of lower highs, indicating trend fatigue, and is now likely forming a base. While the bottom may not yet be in, Merlijn suggests that once this phase concludes, Bitcoin could surge toward $124,000, approaching its current all-time high of around $126,000.
As of now, Bitcoin is trading near $87,700, down over the past 24 hours.
Frequently Asked Questions
FAQs Global Liquidity Bitcoins Real Price
Beginner Questions
1 What does global liquidity mean in simple terms
Global liquidity refers to the total amount of easily spendable money and credit available in the worlds financial system Think of it as the overall fuel for the global economy
2 How could global liquidity affect Bitcoins price
The theory suggests that as more money and credit are created some of that fuel flows into assets like Bitcoin potentially driving its price higher over time
3 What does it mean that Bitcoin is deeply undervalued
It means some analysts believe Bitcoins current market price is significantly lower than what it should be based on certain models or comparisons to the growth of global money supply
4 What is this real price people are talking about
The real price is a theoretical value derived from models Its an estimate not a guaranteed future price
5 Is Bitcoin just a digital currency or is it considered an asset
Its both While designed as a peertopeer currency its fixed supply and adoption have led many investors to treat it as a digital storeofvalue asset similar to digital gold
Intermediate Advanced Questions
6 What specific liquidity models are used to calculate Bitcoins fair value
Common models compare Bitcoins market capitalization to metrics like the M2 money supply or the global monetary base The ratio between these is used to project a theoretical value
7 Doesnt Bitcoins volatility make this comparison unreliable
Yes its a major critique Bitcoin is highly volatile and driven by many factors Liquidity is just one lens not a sole predictor
8 What are the main criticisms of the global liquidity valuation thesis
Critics argue it oversimplifies things by assuming a constant relationship between liquidity and Bitcoins price ignoring other crucial drivers like utility competition from other assets and regulatory shocks
9 If this thesis is correct what are the practical implications for an investor
It could suggest a longterm strategic case for holding Bitcoin as a hedge against currency devaluation However it does