Bitcoin Surge: How the U.S.-EU Trade Pact and M2 Surge Could Propel BTC to $130K

Bitcoin is once again in the spotlight as analysts predict a potential surge to $130,000. Driven by a combination of the U.S.-EU trade pact, M2 money supply growth, and the upcoming FOMC meeting, Bitcoin’s momentum is building. Here’s what you need to know.

Bitcoin and the U.S.-EU Trade Pact: A Bullish Catalyst

The recent U.S.-EU trade deal has been flagged as a significant development for Bitcoin. Analysts suggest that reduced geopolitical risks and a stable economic environment could boost risk-on sentiment, indirectly benefiting Bitcoin. Key points:

• The trade pact is one of the most impactful since 2016.
• Easing tensions between major economies fosters institutional confidence.
• Bitcoin recently broke out of a long-term resistance level, signaling strength.

M2 Surge: How Monetary Expansion Fuels Bitcoin’s Rise

The M2 money supply has grown by 2.3% year-to-date, with a 0.63% surge in June 2025—the largest monthly jump this year. Historically, Bitcoin has correlated with M2 expansion, as seen during the 2020 liquidity surge. Analysts predict:

• A 15-17.5% rise in Bitcoin’s price in the coming weeks.
• A typical 60-90 day lag in Bitcoin’s response to monetary shifts.

FOMC Outlook: What to Expect

The upcoming FOMC meeting adds another layer of uncertainty. While the Fed maintains a hawkish stance, there’s a growing disconnect between rhetoric and liquidity expansion. Key takeaways:

• Only a 5% probability of a rate cut.
• Speculation that the Fed may be preparing for future quantitative easing.
• Bitcoin’s sensitivity to monetary policy shifts could drive further gains.

Bitcoin Supply Dynamics: Institutional Demand vs. Selloff Fears

Recent wallet activity from Galaxy Digital briefly triggered fears of a selloff, pushing Bitcoin to $114,500. However, analysts view this as a “shakeout” rather than weakness, citing:

• Strong ETF inflows outpacing daily Bitcoin issuance.
• Institutional absorption led by entities like BlackRock.
• Long-term whale wallets remain inactive, suggesting accumulation.

Conclusion: A Multifaceted Outlook for Bitcoin

The convergence of geopolitical stability, monetary expansion, and central bank policy creates a compelling backdrop for Bitcoin’s near-term trajectory. Analysts are closely monitoring technical levels and macroeconomic indicators for confirmation of sustained momentum.

FAQs

Q: How does the U.S.-EU trade pact benefit Bitcoin?
A: The pact reduces geopolitical risks and fosters a stable economic environment, boosting risk-on sentiment and institutional confidence.

Q: What is the M2 money supply, and why does it matter for Bitcoin?
A: M2 measures the money supply, including cash and deposits. Bitcoin has historically correlated with M2 expansion, as increased liquidity often drives demand for assets like BTC.

Q: What impact could the FOMC meeting have on Bitcoin?
A: While the Fed is expected to maintain a hawkish stance, any hints of future quantitative easing could bolster Bitcoin’s price.

Q: Are recent Bitcoin price dips a cause for concern?
A: Analysts view recent dips as “shakeouts” rather than signs of weakness, citing strong institutional demand and ETF inflows.