Crypto Market Insights – March 2025

📢 March Signals

🗒️ Market update

Over the past month, the crypto market has experienced a dynamic interplay of macroeconomic tailwinds and headwinds, with Bitcoin and other major cryptocurrencies showing resilience amid shifting global conditions. Bitcoin, hovering between $80,000 and $90,000 after peaking above $108,000 earlier this year, has entered another consolidation phase—its third during this bull market that began around $20,000 in 2023. 

A significant macroeconomic driver has been the rise in global liquidity. The Global M2 money supply, a key indicator of liquid assets including cash and near-money instruments, has continued its upward trajectory since late 2024. The Fed has been sitting on the sidelines since the election but today announced Quantitative Tightening (QT) will be wound back from $25Bn roll off to just $5Bn per month starting in April. This liquidity surge has historically correlated with Bitcoin price rallies, often lagging by about 10 weeks, positioning late March to mid-May 2025 as a potential breakout window for crypto assets. Bitcoin below in orange vs major central bank’s M2.

Compounding this liquidity boost is a weakening U.S. dollar. The Dollar Index (DXY) recently hit a four-month low (below), dropping below key support levels as markets anticipate Fed rate cuts amid slowing inflation. A softer dollar typically enhances demand for risk assets like Bitcoin, which benefits from its status as a dollar-denominated global reserve alternative. When the dollar (DXY) falls other countries M2 denominated in USD automatically rises giving global liquidity a further boost.

However, a notable headwind tempers this optimism: slowing U.S. economic growth. With the Fed’s aggressive tightening cycle since 2022 still reverberating and tariff discussions adding to the uncertainty, GDP growth forecasts for Q1 2025 have been revised downward (the current forecast is 2.3%, to be confirmed next Thursday). This backdrop poses challenges for risk assets, as reduced liquidity in real economic terms could dampen investor appetite.

The NASDAQ has suffered a 13% pullback since its mid-February high, technically constituting a correction. Our view is that the bull market remains intact—a correction is healthy and helps set the stage for the next leg of the rally. Ending QT is one necessary condition for this. Short-term timing is always difficult, but by H2, if not earlier, financial conditions should ease and provide support.

President Trump’s White House Crypto Summit on March 7 and the U.S. Executive Order establishing a Bitcoin Strategic Reserve were highly bullish events that, surprisingly, had little impact on price. Likewise, MicroStrategy (now Strategy) announced a further $21 billion in Bitcoin purchases via a preferred stock issuance, reinforcing its ‘Bitcoin refinery’ narrative—offering Bitcoin exposure with an 8% yield. Additionally, SOL futures have begun trading on the CME, a likely precursor to a U.S. spot ETF, which we expect to be approved imminently. A SUI ETF application also made early this week signals that crypto is back on the menu. 

In summary, the crypto market over the last month has reflected a tug-of-war between rising global liquidity and a weakening dollar—both supportive of Bitcoin’s long-term trajectory—versus the counterpressure of slowing U.S. growth. If historical liquidity lags hold, late March could mark the start of a significant rally, provided macroeconomic headwinds don’t intensify. Investors are watching closely as these forces unfold. This remains a solid environment for dollar-cost averaging into the market.

🗓️ Key dates to watch

• 27 March – GDP growth rate (final) 
• 28 March – Core PCE Price Index 
• 1/4 April – Jobs data JOLTs and Non Farm Payrolls
• 10 April – US CPI

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