US Debt $37T & M2 Growth Fuel Bitcoin Rally to $132K
US federal debt has reached a record $37 trillion after President Trump signed the One Big Beautiful Bill Act on July 4. The surge in US debt and expectations of quantitative easing have raised forecasts for M2 money supply growth.
Since 2020, US debt has climbed 38% from $26.7 trillion to $37 trillion, coinciding with a 925% increase in the Bitcoin price. Bitget chief analyst Ryan Lee links US debt expansion directly to Bitcoin price gains, arguing that swelling deficits will force liquidity measures that underpin asset rallies.
Real Vision analyst Jamie Coutts projects that continued M2 money supply growth could lift Bitcoin to $132,000 by late 2025. Meanwhile, BitMEX co-founder Arthur Hayes warns that a renewed quantitative easing programme might drive Bitcoin as high as $250,000. Elon Musk adds that the new spending legislation could add $2.5 trillion to the US deficit.
Increased money printing and rising inflation concerns may reinforce Bitcoin’s appeal as a scarce digital asset. Traders should watch US debt trends, Fed policy and M2 money supply data closely, as these macro factors remain key drivers of Bitcoin’s price outlook.
Bullish
The record rise in US federal debt to $37 trillion and the prospect of renewed quantitative easing are among the most potent bullish triggers for Bitcoin. Elevated deficits and the ensuing expansion of the M2 money supply historically have propelled investors toward scarce assets, underpinning price rallies. Bitget’s Ryan Lee highlights a direct correlation between US debt levels and Bitcoin price movements, while forecasts from Jamie Coutts ($132,000 by late 2025) and Arthur Hayes (up to $250,000 under a new QE programme) reflect strong upside potential. In the short term, Bitcoin may experience heightened volatility around fiscal and monetary data releases, but the overarching increase in macro liquidity and inflationary pressures support a bullish longer-term outlook.