Alex Carchidi, The Motley Fool

Sat, Jun 21, 2025, 8:13 AM5 min read

• Bitcoin is in the midst of a strong bull run.

• Its prior all-time highs are likely to be broken again, and soon.

• Four factors in particular could drive its price higher.

• 10 stocks we like better than Bitcoin ›

Some moments in the market don't need dramatic catalysts; they just quietly build up momentum until something gives. For Bitcoin, (CRYPTO: BTC) the stars are aligning with uncanny precision in ways that are likely to have a stunning result.

Four macro forces, each with a history of preceding major rallies in the coin, are once again in play. Here's what's unfolding, and why it might matter more than most investors realize.

When central banks turn on the liquidity tap and ensure there's more money sloshing around the financial system, that new money generally flows toward riskier assets, such as cryptocurrency, as greater liquidity emboldens investors to take riskier bets. Furthermore, safer asset classes would have already been bid up to the point of being fairly expensive from the perspective of institutional allocators.

The global M2 money supply hit roughly $108.4 trillion in April, climbing at a pace last seen right before Bitcoin's 2021 breakout to new highs. The coin's performance tends to lag that liquidity gauge by about one quarter.

Liquidity waves eventually peak, but the cash they inject never fully drains from the financial system. If part of that additional base money ends up permanently sequestered in Bitcoin wallets -- as happened after prior monetary easing cycles -- holders will enjoy a higher floor even after central banks commence with new tightening cycles.

When the value of the dollar drops, investors often opt to park their capital in stronger assets that are retaining or increasing in value, like, potentially, Bitcoin.

The dollar index is down roughly 10% year to date, its worst six-month slide since 1986. Fund managers are the most underweight to the currency in two decades, per a recent survey conducted by Bank of America.

For investors, dollar weakness is more than a near-term tailwind for Bitcoin.

A softer greenback often coincides with looser financial conditions abroad, fostering new demand from countries where Bitcoin offers a liquid alternative to depreciating local money. That incremental global bid tends to stick around, because reversing currency weakness usually requires policy shifts that take years to perform.

Similar to money supply, interest rates significantly influence Bitcoin's price. As yields on government-backed debt like U.S. Treasury bills drop, and along with it, the cost of borrowing passed on to the financial system, capital needs to flow to riskier assets to secure a return.