Three Factors Driving Bitcoin’s Price
November 13, 2025
Read Time 2 MIN
Key Takeaways
- Bitcoin tends to rise when global money supply expands and struggles when liquidity tightens.
- Borrowing and derivatives magnify both rallies and corrections for Bitcoin.
- Network activity and investor behavior provide a pulse on sentiment, helping distinguish healthy accumulation from speculative excess.
Bitcoin’s price can look chaotic from the outside. In reality, it tends to respond to three core forces: global liquidity, leverage in the system, and on-chain fundamentals.
In a recent webinar, VanEck CEO Jan van Eck and Head of Digital Assets Research Matthew Sigel discuss how understanding these drivers can make Bitcoin feel far less mysterious—and much more familiar to anyone who has ever studied macro cycles or market psychology.
Global Liquidity: The Tide That Lifts All Coins
Since 2014, Bitcoin has shown a powerful correlation with global money supply (M2). VanEck’s research finds that changes in M2 explain over half of Bitcoin’s price variance, with the Euro’s M2 supply most strongly aligned to Bitcoin’s trajectory.
BTC Price and Global M2 Are Highly Correlated
Global M2 Changes Explain Over 50% of Bitcoin’s Price Movement
Source: VanEck Research; Bloomberg. August 2025. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.
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Leverage: The Accelerator and the Brake
Leverage acts as Bitcoin’s volume knob. When risk appetite is high, traders and institutions take on leverage through futures, derivatives, ETFs, corporate balance sheets, and even on-chain lending platforms. That leverage can turbocharge rallies—but it can also unwind quickly and aggressively, leading to violent sell-offs.
Importantly, crypto leverage today looks more “professional” than in past cycles, migrating from unregulated crypto lenders to regulated exchanges and ETFs:
- Major exchanges handle derivatives
- ETFs concentrate exposure in regulated channels
- Corporate borrowers have diversified revenue streams
- Miner financing increasingly links to AI infrastructure
Still, Bitcoin’s biggest peaks tend to coincide with periods of speculative enthusiasm and widespread leverage. And its sharpest drawdowns often come when that leverage unwinds just as quickly.
On-Chain Fundamentals: The Network’s Pulse
The blockchain offers a unique window into Bitcoin’s health—real-time digital plumbing you can actually inspect.
Rising activity, healthy transaction levels, and expanding participation generally reinforce long-term strength. So does the share of holders in profit who aren’t rushing for the exits all at once.
But Bitcoin isn’t a Web3 tech growth story. It's more of a monetary ecosystem than a consumer network. Daily users and developer activity matter—but they matter less than global liquidity and market structure.
Instead, one of the most useful on-chain signals is investor behavior. When holders collectively sit on large unrealized gains and sentiment turns euphoric, risk tends to rise. When long-term holders are accumulating quietly, drawdowns often set the stage for future rallies.
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IMPORTANT DISCLOSURES
Bitcoin (BTC): The first decentralized cryptocurrency, enabling peer-to-peer transactions without intermediaries, secured through a proof-of-work blockchain.
This content is intended for educational purposes only. Please note that the availability of the products mentioned may vary by country, and it is recommended to check with your local stock exchange. Please note that VanEck may offer investment products that invest in the asset class(es) or industries discussed herein.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the speaker(s), but not necessarily those of VanEck or its other employees.
Investments in digital assets and Web3 companies are highly speculative and involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility and limited liquidity, including but not limited to, inability to liquidate a position; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets.
Digital asset prices are highly volatile, and the value of digital assets, and the companies that invest in them, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss of your entire principal investment.
Digital assets are not generally backed or supported by any government or central bank and are not covered by FDIC or SIPC insurance. Accounts at digital asset custodians and exchanges are not protected by SPIC and are not FDIC insured. Furthermore, markets and exchanges for digital assets are not regulated with the same controls or customer protections available in traditional equity, option, futures, or foreign exchange investing.
Digital assets include, but are not limited to, cryptocurrencies, tokens, NFTs, assets stored or created using blockchain technology, and other Web3 products.
Web3 Companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
© Van Eck Associates Corporation.
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IMPORTANT DISCLOSURES
Bitcoin (BTC): The first decentralized cryptocurrency, enabling peer-to-peer transactions without intermediaries, secured through a proof-of-work blockchain.
This content is intended for educational purposes only. Please note that the availability of the products mentioned may vary by country, and it is recommended to check with your local stock exchange. Please note that VanEck may offer investment products that invest in the asset class(es) or industries discussed herein.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the speaker(s), but not necessarily those of VanEck or its other employees.
Investments in digital assets and Web3 companies are highly speculative and involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility and limited liquidity, including but not limited to, inability to liquidate a position; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets.
Digital asset prices are highly volatile, and the value of digital assets, and the companies that invest in them, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss of your entire principal investment.
Digital assets are not generally backed or supported by any government or central bank and are not covered by FDIC or SIPC insurance. Accounts at digital asset custodians and exchanges are not protected by SPIC and are not FDIC insured. Furthermore, markets and exchanges for digital assets are not regulated with the same controls or customer protections available in traditional equity, option, futures, or foreign exchange investing.
Digital assets include, but are not limited to, cryptocurrencies, tokens, NFTs, assets stored or created using blockchain technology, and other Web3 products.
Web3 Companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.
© Van Eck Associates Corporation.