• Is Bitcoin About To Crash?

• The Institutional Megatrend

• XRP Blasts Above $3

• Raoul Pal: A Tsunami Is Coming

• And more…

Market Data Prices as of 4:30am ET

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IS BITCOIN ABOUT TO CRASH?

The Relationship Between Global M2 and Bitcoin: What You Need to Know

Global M2 Money Supply and Bitcoin have a unique connection that’s better understood as a partnership than a competition.

So, what’s the deal with M2?

It refers to a broad measure of money, encompassing physical cash, money in bank accounts, and retail money market mutual funds.

More money circulating in the system means more funds available to buy Bitcoin.

In fact, there's a strong correlation: as M2 grows, Bitcoin tends to follow—although with a delay of about 70 days.

This is generally great when M2 increases, as it has in past years.

Unfortunately, that’s not the case today.

The current trend suggests that Bitcoin may face a downturn in the coming months if this correlation holds true.

However, looking ahead, there’s hope.

If the market mimics the pattern seen in the 2016/2017 bull run, this potential dip could simply be a brief pause before Bitcoin rises again.

What could turn things around for Bitcoin?

Money printing and interest rate cuts are key factors.

When the government prints money and lowers rates, more liquidity enters the financial system, ultimately benefiting Bitcoin.

And who’s likely to be the one printing cash and slashing rates soon?

You guessed it—the US government.

During the COVID period, the US took on a significant amount of debt.

By mid-2025, those debts will need to be refinanced, likely prompting massive money printing, rate cuts, and new loans at lower rates.

This cycle could result in Bitcoin benefiting as more liquidity floods into the system.

So, whether Bitcoin climbs ahead of M2 or waits for liquidity to catch up, the future looks promising for Bitcoin investors!

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THE INSTITUTIONAL MEGATREND

Bitcoin is no longer just a speculative asset for individual investors.

Corporate adoption of Bitcoin is emerging as a true megatrend, one that will push crypto prices to new heights over the next year.

According to Matt Hougan, Chief Investment Officer at Bitwise, we’re on the cusp of something much bigger than the moves by Michael Saylor and MicroStrategy.

As Matt explained in a recent investment memo, we are about to witness a significant shift in the market:

This isn’t just a momentary trend – it’s a fundamental shift in how companies view Bitcoin as part of their financial strategy. Let’s break it down.

Why MicroStrategy’s Strategy is Just the Tip of the Iceberg

While MicroStrategy has grabbed headlines for its Bitcoin purchases, the reality is that its impact is only a fraction of what’s to come.

Despite being ranked as the 220th largest company globally, MicroStrategy has managed to purchase more Bitcoin than all of the Bitcoin mined in 2024.

In total, they acquired roughly 257,000 BTC, significantly surpassing the 218,829 BTC mined throughout the year.

But this is just the beginning.

What happens when mega-companies like Meta, which is 20 times the size of MicroStrategy, start to follow suit?

Bitcoin Adoption Is Already Widespread – And Growing

Today, 70 publicly traded companies, including Tesla and Block, are already holding Bitcoin on their balance sheets, with a total of 141,302 BTC (excluding MicroStrategy). Private companies like SpaceX also add a substantial amount, holding 368,043 BTC.

This trend is just starting, and MicroStrategy represents less than 50% of the corporate Bitcoin market. As more companies join in, this percentage will shrink dramatically.

The New FASB Rules Are About to Supercharge Bitcoin Adoption

The most exciting catalyst for this megatrend is the newly established FASB accounting rules.

With these updated rules, companies can now record Bitcoin gains as profits on their balance sheets.

This removes a significant reputational risk associated with Bitcoin ownership and makes it far easier for companies to hold Bitcoin.

Matt Hougan predicts that this regulatory change will lead to a surge in the number of companies buying Bitcoin, estimating that the number will explode from the current 70 to hundreds or even thousands.

The Bottom Line

As more and more companies invest in Bitcoin, we’re likely to see significant growth in Bitcoin prices in 2025 and beyond. Whether for inflation hedging, profit potential, or financial security, the momentum is undeniable. As Matt Hougan puts it:

The megatrend is here, and it’s time to position yourself for the inevitable rise of corporate Bitcoin adoption.

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XRP BLASTS ABOVE $3

XRP is leading the pack of major cryptocurrencies, surging by an impressive 19% in the past 24 hours to a price of $3.18.

This marks the highest value for the Ripple-linked coin since 2018. As XRP gains momentum, trading volumes are climbing, and the overall market sentiment is improving, with XRP taking a commanding position in the crypto landscape.

The surge is attributed to growing excitement surrounding potential approval for an XRP ETF and ongoing developments with the XRP Ledger meme coins. XRP's significant week-to-week performance has pushed it to the third spot by market cap.

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RAOUL PAL: A TSUNAMI IS COMING

Raoul Pal, in his latest interview, expresses his belief that the future will be dominated by a "tsunami of technology" that is so deflationary it is difficult to fully grasp.

He anticipates business cycle inflation but predicts that inflation will ultimately remain below 2% for an extended period, possibly spiking to around 4% before dipping again.

While he isn't overly concerned about inflation, he acknowledges the ongoing challenges it presents, particularly in the context of prices not falling.

Looking further ahead, Pal views this as potentially the most deflationary period in history, driven by advancements in robotics and AI.

He highlights the growing reliance on technology, such as Amazon's increasing use of robots in its operations, now employing more robots than people.

These robots, working tirelessly around the clock, represent a fundamental shift in productivity and labor dynamics.

Pal suggests that this technological wave will create an environment of virtually limitless, low-cost labor, revolutionizing economies and markets.

Take a look at the video below to hear more clips from Raoul Pal’s fascinating update:

OTHER NEWS

• Jon Charbonneau, co-founder of an investment firm, discusses the transformative potential of Bitcoin Layer 2 solutions, emphasizing the ability to scale BTC’s functionality and privacy securely, unlocking new market opportunities and ensuring Bitcoin’s dominance in a decentralized future.

• John Mac Ghlionn, contributor at The Hill, cautions that Donald Trump's embrace of Bitcoin could undermine its decentralized nature through government control, institutional adoption, and regulatory oversight, turning it from a revolutionary tool into a state-controlled asset.

• Neil Patel of The Motley Fool presents Bitcoin as a superior investment over gold, citing its fixed supply, digital accessibility, historical returns, and growing popularity among younger investors.

• Bitcoin Mechanic, co-founder of Ocean Mining, explains how OCEAN mining pools outperform traditional FPPS pools, highlighting that miner decisions supporting Bitcoin's network integrity outweigh minor fee impacts, debunking criticisms focused on revenue percentages.

• Saifedean Ammous, economist and author, critiques Javier Milei's economic policies, highlighting their impact on money supply growth, public debt, taxes, and the departure from libertarian principles, positioning Milei as a populist contributing to Argentina's fiscal instability.

• Marie Poteriaieva, co-founder of D.Center, discusses Bitcoin’s evolution into an established form of money, driven by significant price increases, spot ETF approval, growing adoption as a store of value and payment method, and developments like the Lightning Network.

• Natalie Smolenski, founder and executive director of the Texas Bitcoin Foundation, draws parallels between Poland’s 1980s Solidarity movement and Bitcoin’s modern grassroots movement against government monetary control, emphasizing the pursuit of economic freedom.

• L0la L33tz, journalist and privacy advocate, highlights Oklahoma’s Bitcoin Freedom Act, which facilitates Bitcoin payments for state employees, merchants, and vendors, while protecting non-custodial software developers and decentralized exchanges.

• Nunya Bidness, host of the ‘Bitcoin And...’ podcast, introduces the 'Forest Walker,' a Bitcoin-mining robot designed to autonomously manage forest fuel loads, generate income, and improve forest health through gasification and biochar production.

• Derek Ross, a Nostr developer, presents Notedeck, a revolutionary Nostr browser that functions as an operating system with micro-apps, offering local-first data storage, multicast capabilities, and extensive customization for seamless user experience.

• Scoresby, a Stacker News user, explains how running a Bitcoin node contributes to the economy by verifying payments and enforcing consensus rules, highlighting the importance of nodes in shaping Bitcoin’s future.

• Che Kohler of The Bitcoin Manual discusses the theoretical risks of Bitcoin reaching zero value, including quantum computing, protocol vulnerabilities, and regulatory actions, while asserting that its decentralized nature makes a complete collapse unlikely.

• Kaká Furlan, founder of Area Bitcoin, explores Wei Dai's influence on Bitcoin, detailing how his B-Money proposal introduced key concepts like decentralization, Proof of Work, and distributed ledgers that influenced Satoshi Nakamoto’s Bitcoin whitepaper.

• Darthcoin, a Bitcoin educator, explains how to create a private Lightning Network for secure, peer-to-peer BTC transactions within closed communities, enhancing privacy by setting up unannounced channels between trusted nodes.

• Mike Hobart, communications manager at Great American Mining, argues that Bitcoin’s deflationary nature offers a superior alternative to inflationary monetary systems, enabling wealth preservation through saving and eliminating debt-based economics.

• Alex Gaynor, a software resilience engineer, explores the challenges faced by open-source projects in securing funding, including difficulties in articulating value, maintainers’ preference for autonomy, and the mismatch between funding levels and project needs.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.