Gold Is A $4T Liquidity Sponge: BTC USD Fair Value At $250,000

Looking at how safe havens have performed so far this year, one thing is clear: fear is driving markets. With Donald Trump as US President, tariffs were swiftly rolled out, and businesses, even nations, had to shield themselves from uncertainty. This flight to safety has funneled trillions of dollars into bonds, high-quality equities, crypto, and gold. BTC USD rocketed to new all-time highs in August, breaking $124,500, but gold has truly stolen the show with its relentless climb.

In 2025, gold prices have trended strictly upward, a pattern that’s hard to miss. According to CME data, the yellow metal is up nearly +45% over the past ten months, jumping from about $2,640 in late 2024 and peaking at $3,824 earlier this week. This spike was hardly surprising: The yellow metal remains a premier safe haven preferred by central banks.

(Source: MGC, TradingView)

The gold buying frenzy has inflated its total market capitalization by nearly $4T in just the past few months. At that blistering pace, it has absorbed value equivalent to the entire crypto market cap, and nearly 2X the Bitcoin market cap. This rotation into hard assets was a glaring signal of investor caution. Yet analysts haven’t written off Bitcoin: despite recent pullbacks, it’s holding steady above $110,000, rebounding from the sharp dip on September 22.

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Is gold a $4T Liquidity Black Hole?

At press time, gold is changing hands at around $3,765, retreating from its all-time high of $3,824 on September 23.

Notably, even as global M2 liquidity swelled past $114.1T in recent days, crypto prices have been stagnant, even falling.

Instead, gold has been the biggest beneficiary. The gold market cap now exceeds $25.2T, up from $22T in early June. That gap reflects over $3.5T poured into the metal in mere weeks.

The Gold Price is Wrong

Gold is actually cheap relative to the global currency fiat money supply.

And the setup for much higher prices is staring us in the face.

At $3,600, everyone knows that gold is at nominal all-time highs.

But relative to M2, it’s well below historical… pic.twitter.com/98QMsyCuxl

— Katusa Research (@KatusaResearch) September 20, 2025

This massive capital shift cements gold’s role as a liquidity sponge, hinting that institutional investors are bracing for economic turbulence ahead.

They prefer assets that offer stability over fiat currencies, which are vulnerable to endless money printing. Meanwhile, the Federal Reserve plans to continue easing policy over the next few weeks before pausing well into 2026.

As funds chase scarce assets, Bitcoin, which is the digital gold, and even top Solana meme coins, could ride the wave. And when it does, the upside could be explosive.

On X, one analyst thinks BTC USD could easily surge above $200,000 to its fair value at $250,000.

something is soaking up a LOT of liquidity.

In other news, global M2 just went absolutely vertical… and btc fair price is 250K pic.twitter.com/awzPuTUzyz

— zerohedge (@zerohedge) September 24, 2025

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Will Rising Global M2 Propel BTC USD To $250,000?

Raw data points to one key driver behind this momentum: the expanding global money supply. Over the past year, aggregate M2 has grown nearly +9%, positioning assets like Bitcoin as prime beneficiaries of this liquidity flood.

The outlook sharpens further now that the Federal Reserve has shifted course, delivering rate cuts amid stubborn inflation, ballooning public debt nearing $36T, and softening labor markets.

History backs this view. In major cycles like 2017–2021, surges in global M2 often foreshadowed asset rotations by two to three months.

(Source: GBeometrics)

If patterns hold, BTC USD looks undervalued today, setting the stage for a repricing that could catapult it to new highs.

BTC Analysts at Tephra Digital expect Bitcoin to rise to $167k-185k by the end of this year if correlation with M2 and Gold continues.

Bitcoin still continues to follow the money supply of global CBs with a lag of about 100 days (since September 2023). pic.twitter.com/bevpHtBBeB

— Umair Crypto (@Umairorkz) September 5, 2025

Tom Lee of Fundstrat previously predicted BTC USD to hit $250,000 by the end of 2025, fueled largely by institutional inflows. Similarly, analysts at VanEck and Standard Chartered see the bull cycle topping out around that level.

Institutions clearly aren’t sitting idle. Despite the cooldown in the past few days, they’ve snapped up over $3B in spot Bitcoin ETF shares this month alone.

(Source: SosoValue)

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