Bitcoin’s fixed supply limit of 21 million coins is creating a structural scarcity as global liquidity expands, potentially driving its value toward $1 million. This supply-demand imbalance positions Bitcoin as a hedge against fiat currency depreciation amid ongoing monetary expansion.
The M2-per-Bitcoin ratio, currently at a 12-year high of $5.7 million, highlights Bitcoin’s extreme scarcity relative to worldwide money supply. This metric demonstrates the widening gap between increasing fiat circulation and Bitcoin’s capped availability.
Institutional adoption remains a critical demand driver, with firms like River reporting substantial Bitcoin accumulations since mid-2024. Sovereign entities are also showing deepening interest, indicating broadening mainstream acceptance.
Market analysts including investor Fred Krueger contend that approximately $1 trillion in capital inflows could elevate Bitcoin to the $1 million threshold. This scenario underscores Bitcoin’s function as a protective asset against monetary debasement and currency devaluation.
Fundamental metrics such as the M2-per-Bitcoin ratio and accelerating institutional participation support a bullish long-term valuation outlook. Bitcoin’s role as a scarce alternative to inflationary fiat currencies continues to strengthen amid global economic conditions.