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Bitcoin price shows strength as investors expect the Fed to resume printing, but a handful of global macroeconomic headwinds are still in play.

Bitcoin (BTC) last closed above $68,000 on April 11, despite trading above $67,000 several times in the past five days. Even as Bitcoin gained 2% on May 20, another 7% move is needed to meet its all-time high. Meanwhile, gold reached a record high of $2,450 on May 20, and the S&P 500 index climbed to its all-time peak of 5,325 points. This backdrop has left BTC investors pondering the factors restraining its progress.

It can be argued that Bitcoin’s 51% gains year-to-date reflect investors’ anticipation of the monetary expansion that has recently benefited other assets. With the United States Federal Reserve needing to inject liquidity — either to support the troubled banking sector or to stimulate the economy — investors typically turn to scarce assets for protection. This inclination intensifies if there is an increasing likelihood of an economic recession.

According to UFed data, the broader U.S. monetary base (M2), which had stagnated at $20.8 trillion since May 2023, surpassed $21.0 trillion in April 2024. This shift marks the end of a contraction period that began in April 2022 when the M2 indicator reached $22 trillion. Regardless of interest rate trends, the increase in circulating money suggests rising inflationary pressures, even if companies and individuals are currently hesitant to spend.

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