Source: Cointelegraph Original: "{title}"

Bitcoin could rise to over $250,000 by the end of this year, with an expected increase in the money supply being a key factor driving the world's largest cryptocurrency.

Bitcoin (BTC) price increases in 2025 may be driven by the U.S. Federal Reserve's shift to quantitative easing (QE). During difficult financial conditions, the Fed lowers interest rates by purchasing bonds and injecting money into the economy, encouraging consumption.

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer of Maelstrom, stated, "Bitcoin trading is entirely based on market expectations of future fiat currency supply."

In a Substack article on April 1, Hayes wrote, "If my analysis of the Fed's shift from tightening (QT) to quantitative easing (QE) purchasing government bonds is correct, then Bitcoin reached a local low of $76,500 last month, and now we are starting to move towards $250,000, expected to be achieved before the end of the year."

The Fed has lowered the cap on reinvestment of maturing government bonds from $25 billion per month to $5 billion, effective April 1, while keeping the reinvestment of mortgage-backed securities (MBS) at $35 billion.

According to comments from Fed Chairman Jerome Powell, Reuters reported that the Fed may allow MBS to mature without replacement investments, while excess principal payments may be reinvested in government bonds.

Hayes added, "From a mathematical perspective, this keeps the Fed's balance sheet stable; however, this is essentially quantitative easing for government bonds. Once officially announced, Bitcoin's price will soar rapidly."

Other analysts predict a more conservative increase in Bitcoin prices based on its correlation with global liquidity indices.

Based on M2 money supply growth, Bitcoin is expected to reach $132,000. Source: Jamie Coutts

According to estimates from Jamie Coutts, Chief Crypto Analyst at Real Vision, the growing money supply could push Bitcoin's price to exceed $132,000 by the end of 2025.

The Fed will "inject dollars into the market."

Hayes stated that he "buys Bitcoin and junk coins" when Bitcoin's price fluctuates between $90,000 and $76,500, showing his confidence in the crypto market for the remainder of 2025. His capital deployment speed will increase or decrease based on the accuracy of predictions.

Hayes wrote, "I still believe Bitcoin can reach $250,000 by the end of the year, as the BBC has now made Powell retract his statements, and the Fed will inject dollars into the market." He added, "This will prompt Xi Jinping to instruct the People's Bank of China to stop tightening domestic monetary policy to maintain the dollar-yuan exchange rate, thereby increasing the net supply of yuan."

Despite the optimistic predictions, many market participants are betting that Bitcoin's price peak at the end of 2025 will be lower.

Source: Polymarket

According to data from the largest decentralized prediction market, Polymarket, only 9% of traders are betting that Bitcoin will reach $250,000, while 60% expect Bitcoin to reach $110,000 by 2025.

Nevertheless, Bitcoin and global risk appetite remain under pressure from global tariff concerns, especially ahead of U.S. President Donald Trump's upcoming announcement of tariff policies on April 2.

Stella Zlatareva, communications editor at Nexo digital asset investment platform, told Cointelegraph, "Long-term positions remain unchanged, but short-term market momentum seems closely related to developments in macroeconomic news."

Related: South Korea's 7-Eleven to accept CBDC payments in national pilot project.

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