Bitcoin’s $270K Target: Global Liquidity Surge vs. Fiat Decline

Crypto pundit Kyle Chassé has drawn a direct line from central bank balance sheets to Bitcoin’s price chart. In a recent analysis, he highlighted that the global M2 money supply—a broad measure of money including cash and deposits—has hit a historic $98 trillion. This expansion, driven by aggressive monetary policies in the United States, the Eurozone, China, and Japan, is growing at a year-to-date pace of 6.2%. Chassé notes this is the fastest rate of increase since the massive liquidity injections during the 2020 pandemic response.

For Chassé, this creates a simple mathematical reality for a fixed-supply asset like Bitcoin. “In a system where the fiat denominator is permanently diluted, fixed-supply assets are not going up in price, but… cash is ‘loudly becoming worthless,'” he stated. His accompanying chart points to a Bitcoin target of $270,000, a figure derived from this relationship between expanding fiat supply and Bitcoin’s scarcity. This perspective is shared by others in the crypto sphere, including BitMEX co-founder Arthur Hayes, who has also predicted that rising dollar liquidity would be a catalyst for higher BTC prices.

The liquidity surge coincides with notable weakness in major global currencies, reinforcing Bitcoin’s purported role as a digital safe haven. The U.S. Dollar Index (DXY) has declined since the start of the year, and the Japanese yen is also down year-to-date. Analysts like Chassé attribute this fiat decline to expansive government fiscal policies aimed at stimulating economies through increased spending, which often necessitates further money creation.

This environment, where governments are perceived to be devaluing their currencies, is considered fundamentally bullish for Bitcoin. Its algorithmic cap of 21 million coins stands in stark contrast to the seemingly endless printing press of fiat money. As such, Bitcoin is increasingly pitched not merely as a speculative tech asset but as a legitimate hedge against currency debasement and long-term inflation—a digital ledger existing as an antidote to what critics see as the flaws of the fiat ledger.

Despite the compelling macro narrative, Bitcoin’s recent price action tells a story of immediate risk and volatility. Contrary to the predictions that liquidity would instantly boost prices, Bitcoin has recently traded like a traditional risk asset, erasing its year-to-date gains. This downturn has been attributed to mounting political tensions in the United States and the increasing likelihood of a federal government shutdown, which sparked a drop below $87,000.

Other analysts are urging a longer-term view to see through this noise. Crypto pundit Merlijn suggests that Bitcoin is currently undergoing a necessary corrective phase within a larger bullish structure. He identifies the recent price action as “waves 1, 2, and 3 with lower highs,” signaling trend fatigue. The next phase, he argues, involves forming “waves 4 and 5,” which would represent a reset and base-building period. While Merlijn cautions that “the bottom may not yet be in,” he posits that once this consolidation completes and liquidity conditions reassert their influence, Bitcoin could rally to approximately $124,000—bringing it close to its current all-time high of $126,000.

At the time of writing, Bitcoin price is trading around $87,700, reflecting the ongoing tug-of-war between powerful macro tailwinds and near-term geopolitical headwinds. The central debate now is one of timing: whether the immediate pressures of U.S. political risk will continue to dominate, or whether the historic flood of global liquidity will ultimately prove to be the decisive force for the world’s premier cryptocurrency.