Bitcoin may still rise to over $250,000 before the end of the year, with expectations of an increasing fiat supply remaining the significant catalyst for the world’s first cryptocurrency.
Bitcoin’s (BTC) 2025 price rally may be boosted by the US Federal Reserve pivoting to quantitative easing (QE), when the Fed buys bonds and pumps money into the economy to lower interest rates and encourage spending during difficult financial conditions.
“Bitcoin trades solely based on the market expectation for the future supply of fiat,” according to Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom.
Hayes wrote in an April 1 Substack post:
“If my analysis of the Fed’s major pivot from QT to QE for treasuries is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end.”
The Fed reduced the Treasury runoff cap to $5 billion per month from $25 billion effective April 1, while keeping mortgage-backed securities (MBS) runoff steady at $35 billion.
The Fed may allow the MBS roll off without replacement and the excess principal payment might be reinvested into Treasurys, according to comments from Fed Chair Jerome Powell published by Reuters.
“Mathematically, that keeps the Fed balance sheet constant; however, that is treasury QE. Bitcoin will scream higher once this is formally announced,” added Hayes.
Related: Bitcoin’s next catalyst: End of $36T US debt ceiling suspension
Other analysts are eying a more conservative Bitcoin price top based on BTC’s correlation with the global liquidity index.
The growing money supply could push Bitcoin’s price above $132,000 before the end of 2025, according to estimates from Jamie Coutts, chief crypto analyst at Real Vision.
Related: Bitcoin ‘more likely’ to hit $110K before $76.5K — Arthur Hayes
Fed will “flood the market with dollars”
Hayes has been “buying Bitcoin and shitcoins at all levels between $90,000 to $76,500,” showcasing his conviction in the crypto market for the rest of 2025. The pace of capital deployment will increase or decrease depending on the accuracy of his predictions.
“I still believe Bitcoin can hit $250,000 by year-end because now that the BBC has put Powell in his place, the Fed will flood the market with dollars,” wrote Hayes, adding:
“That allows Xi Jinping to instruct the PBOC to stop tightening monetary conditions onshore to defend the dollar-yuan exchange rate, which increases the net quantity of yuan.”
Despite the optimistic prediction, many market participants are betting on a lower Bitcoin price top for the end of 2025.
Only 9% of traders have placed bets on Bitcoin hitting $250,000, while 60% expect Bitcoin to hit $110,000 in 2025, according to Polymarket, the largest decentralized predictions market.
Still, Bitcoin and global risk appetite remain pressured by global tariff fears ahead of US President Donald Trump’s upcoming tariff announcement, scheduled for April 2.
“Long-term positioning remains intact, but near-term momentum appears tethered to unfolding macro headlines,” Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, told Cointelegraph.
Magazine: Bitcoin’s odds of June highs, SOL’s $485M outflows, and more: Hodler’s Digest, March 2 – 8
