Bitcoin Surges 8% as Whales Bet Big on $105,000 Rally

Bitcoin's price has surged by 8% from its March 11 low of $76,703, driven by large investors aggressively buying the dip with leverage. Margin longs on Bitfinex have reached their highest level since November 2024, with an addition of 13,787 BTC over 17 days. This bullish positioning, currently valued at $5.7 billion, indicates strong confidence in Bitcoin’s potential for further gains despite recent price fluctuations.

Analysts suggest that Bitcoin’s price movements are closely tied to the global monetary base, meaning it tends to rise as central banks inject liquidity into the economy. With increasing recession risks, there is a growing likelihood of expansionary monetary policies that could boost the money supply. If this correlation holds, Bitfinex whales could capitalize on a rally above $105,000 in the next two months.

In early September 2024, Bitfinex margin traders added 7,840 BTC in long positions, coinciding with a period of bearish momentum as Bitcoin struggled to reclaim the $50,000 level for over three months. Despite the downturn, these traders held their positions, and Bitcoin’s price surged past $75,000 less than two months later. The global M2 money supply bottomed out around the same time these traders increased their Bitcoin exposure, further reinforcing the correlation between liquidity and Bitcoin’s price.

However, it is challenging to establish a direct cause-and-effect relationship between money supply and investors’ willingness to accumulate Bitcoin, especially given the influence of major events. For instance, Donald Trump’s election as US president in November 2024 significantly fueled Bitcoin’s rally due to the new administration’s pro-crypto stance, regardless of global M2 trends and liquidity conditions.

Michael Saylor’s latest plan to raise up to $21 billion in fresh capital for Strategy to acquire more Bitcoin could also shift market dynamics. Strategy remains the largest corporate Bitcoin holder, with 499,096 BTC acquired at a total cost of $33.1 billion, reinforcing its long-term bullish strategy. This move could counteract the $4.1 billion in net outflows from Bitcoin spot exchange-traded funds (ETFs) since Feb. 24.

The expansion of the global money supply may have influenced the increase in Bitfinex margin longs, but Bitcoin’s push toward $105,000 could be primarily driven by industry-specific news and events. Representatives of Donald Trump have held discussions about potentially acquiring a stake in Binance, which could signal a more crypto-friendly US government. However, the market impact of these discussions has yet to yield concrete benefits.

The Office of the Comptroller of the Currency (OCC) has not yet clarified whether banks can custody digital assets and manage stablecoins without prior approval. Similarly, Acting SEC Chairman Mark Uyeda announced plans to remove crypto-specific provisions from a proposed rule that would expand exchange definitions. The US Securities and Exchange Commission is currently reviewing requests from spot Bitcoin ETF issuers to permit in-kind creations and redemptions, allowing shares to be exchanged directly for Bitcoin instead of using the traditional cash-based method.

Global macroeconomic conditions have deteriorated, putting pressure on Bitcoin’s price. However, these same factors gradually push governments toward economic stimulus measures and expand the M2 money supply. If this trend continues, it should ultimately create conditions for Bitcoin's price to meet the $105,000 prediction by May 2025 and possibly go even higher.