Jan Van Eck, CEO of VanEck, has reaffirmed an ambitious price target for Bitcoin. The firm projects that BTC could reach $180,000 before the end of the current bull cycle. This forecast is based on the growing Bitcoin correlation with M2 liquidity globally.
VanEck’s analysis, detailed in its recent “Bitcoin ChainCheck” report, reveals a historical connection. Since 2014, Bitcoin has shown a correlation of approximately 0.5 with global M2 growth. This means that changes in the fiat money supply explain a significant portion of its long-term returns.
Nathan Frankovitz, a VanEck investment analyst, pointed out a key fact. Global liquidity (considering the top five currencies) has practically doubled since 2013. This figure grew from $50 trillion to nearly $100 trillion. During that same period, Bitcoin’s price increased over 700 times.
This relationship underscores Bitcoin’s emerging role as a neutral reserve asset. The global economy has experienced synchronized currency debasement. In fact, the Euro’s M2 money supply shows the strongest correlation (r = 0.69) with BTC’s price. VanEck highlights that Bitcoin now represents about 2% of the global money supply. Therefore, the firm believes that holding less than 2% in digital assets equates to an implicit short position against this asset class.
Is the Futures Market the Key to $180K?
VanEck isn’t just looking at liquidity; it also points to the derivatives market. Leverage in futures is crucial to reaching the $180,000 target. Since October 2020, nearly 73% of BTC’s price variance is explained by changes in futures open interest (OI).
Although leverage reached high levels (95th percentile) in early October, the market’s composition has matured. There is now greater participation from institutions and ETF market makers. This institutional activity is shifting towards regulated venues, such as the CME.
Despite recent volatility, which saw OI fall from $52B to $39B following a correction, the outlook remains. Farzam Ehsani, CEO of VALR, suggests that Bitcoin is trying to catch up to gold, not necessarily replace it. Technically, BTC is consolidating between $108,000 and $125,000. As long as it holds the key support of $108,600, the structure favors a bullish continuation. A clear break above $125,000 would confirm renewed strength toward new highs.
