Bitcoin is holding close to $120,000 and traders are wondering if it has the fuel to hit a new all-time high this year.
Three major forces could make that happen. And now, a new U.S. policy change might just give Bitcoin the biggest push of all.
Money Supply Surge Could Push Bitcoin Higher
Global liquidity is hitting record levels. In July, the M2 money supply across the 21 largest central banks reached $55.5 trillion. The U.S. alone has run a $1.3 trillion budget deficit in just nine months.
That kind of money expansion often drives investors toward hard assets like Bitcoin. Even big-name stocks, like Nvidia, have seen their value soar, from $2.3 trillion in March to $4.4 trillion, without any big jump in earnings.
In this kind of market, liquidity matters more than old-school valuations.
Bitcoin ETFs Are Closing in on Gold
Spot Bitcoin ETFs in the U.S. now hold $150 billion in assets, compared to gold’s $198 billion. If Bitcoin ETFs overtake gold, it would be a huge milestone sending a clear message to big investors and institutions that BTC is no longer just a “risk-on” asset, but a serious reserve option.
Such a shift could open the door for sovereign wealth funds, more public companies, and governments to add Bitcoin to their holdings.
Retail Investors Still Missing
Here’s the surprising part – retail investors aren’t driving this rally yet.
Even with Bitcoin up 116% in the past year, crypto trading apps like Coinbase and Robinhood aren’t seeing the download surges they had in November 2024. That means the biggest wave of small investor money might still be ahead of us.
If retail jumps in during 2025, history suggests Bitcoin’s climb could speed up fast.
The $12 Trillion Retirement Shift
This week, U.S. President Donald Trump signed an executive order allowing cryptocurrencies and other alternative assets in 401(k) retirement accounts.
“Done right, this could unlock trillions in retirement capital for Bitcoin and other compliant assets,” said Michael Heinrich, co-founder and CEO of 0G Labs. Bitwise CIO Matt Hougan called it “transformative for the industry.”
The U.S. retirement pool is worth about $12 trillion. If similar rules extend to IRAs, 403(b), and 457(b) plans, the total could top $30 trillion – inflows that could double the size of the entire crypto market.
What’s Next
Bitcoin still faces challenges but the setup is hard to ignore.
With record money supply, ETFs closing in on gold, retail still on the sidelines, and retirement capital now in play, Bitcoin could be looking at one of its strongest years yet.
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