Bitcoin Volatility and Economic Trends: PMI and Global Liquidity Could Send Bitcoin to New All-Time Highs in 2025!

Bitcoin to New All-Time Highs in 2025!

Cryptocurrency market sentiment is moving toward optimism as the PMI indicator, which shows economic health, stays positive. As Of March 5, 2025, after 26 months of contraction, ISM manufacturing PMI has climbed above 50 in February and held in March 2025. The improved PMI and rising global liquidity via the M2 money supply promise a bright future for Bitcoin. Notably, Bitcoin prices correlate with the PMI, and economic expansions boost its value.

PMI and Bitcoin: A Key Market Indicator

The Institute for Supply Management (ISM) has tracked economic health for decades through its PMI. Collected via surveys of industry leadership, the PMI distills data across parameters, offering snapshots of new order volumes, shifts in employment, and the overall health of supply networks within the US economy.

The manufacturing PMI specifically serves as an indicator of future economic movement, signaling possible periods of growth or decline. Following a period of contraction lasting 26 months, the PMI value exceeded 50 in January and February. Though demand has some fragility associated with ongoing tariff programs, some analysts interpret this sustained rise above the benchmark as a possible marker of overall economic recovery.

The Correlation Between Bitcoin and Economic Growth

Bitcoin volatility and economic trends have often been closely connected. A study conducted by S&P Global Market Intelligence revealed a robust 74% alignment between PMI shifts and corporate profits, underlining the principle that economic growth frequently drives demand for risk-bearing assets like Bitcoin.

Graph 1 – Published on TradingView, March 5, 2025.

Macroeconomic analyst Raoul Pal highlights that the PMI typically anticipates broader market changes by roughly one month. With economic recovery underway, investment may be directed into riskier ventures that favor Bitcoin. Analysts suggest that a sustained PMI uptrend could drive a notable Bitcoin price increase into late 2025 and early 2026, reflecting business cycle peaks and suggesting a Bitcoin and PMI correlation.

The Role of Global M2 in Bitcoin’s Future

The global M2 money supply significantly impacts Bitcoin’s price trends, acting as a key influence tied to liquidity. Real Vision research indicates a roughly 10-week delay between changes in the global M2 aggregate and Bitcoin’s price reaction.

Researchers like Colin Talks Crypto and Lyn Alden suggest that M2 levels dictate Bitcoin price action roughly 83% of the time. Broadly speaking, increasing global M2 tends to coincide with a rising Bitcoin value, underscoring its sensitivity to macroeconomic liquidity. The continuation of rising liquidity might presage an approaching bullish period for Bitcoin.

Where is Bitcoin Heading?

Signs of economic growth, as indicated by the Purchasing Managers’ Index, alongside increasing global liquidity impact on Bitcoin, suggest a cautiously optimistic outlook. This resurgence within the economic cycle suggests the potential for new peak valuations tied to restored confidence in risk-bearing assets among institutional investors.

Regardless, market instability is still a notable consideration. Uncertainty could be further amplified by the upcoming economic agenda, from protectionist tariffs to adjustments of the existing regulation, which need continued monitoring. Participants must closely assess larger market and regulatory situations to anticipate Bitcoin’s subsequent directional movements.

Navigating Uncertainty in the Crypto Market

Bitcoin volatility and economic trends have long been similar, and Bitcoin’s overall path still remains linked to prevailing economic forces. Increased global liquidity impact on Bitcoin, coupled with rising PMI, may strengthen the base for a significant price surge, highlighting a Bitcoin and PMI correlation.

Nonetheless, caution is advised. The future of Bitcoin volatility and economic trends will continue to be influenced by governmental economic interventions, changes in regulatory frameworks, and the performance of general financial markets. Therefore, it remains vital that investors track pertinent macroeconomic data when evaluating participation in this frequently fluctuating market.