Liquidity and Institutional Demand Anchor BTC’s Strength
At the end of August, global liquidity remained elevated. According to StreetStats, as of August 27, 2025, the total M2 money supply across major economies reached approximately USD 95.116 trillion, a record high, with a quarter-on-quarter increase of 3.87%. This indicates continued monetary easing in the short term and provides crucial support for Bitcoin’s strength. At the same time, institutional holdings became more concentrated. By August 27, U.S.-listed spot Bitcoin ETFs held about 1.3 million BTC, accounting for roughly 6% of circulating supply. In mid-August, MicroStrategy purchased another 430 BTC, raising its total holdings to 629,376 BTC. These additional acquisitions, concentrated in July and August, show that short-term market volatility has not deterred institutional long-term allocation.
On the regulatory front, positive developments earlier in the month continued to reverberate. On August 7, the U.S. President signed an executive order requiring regulators to allow 401(k) retirement plans to invest in Bitcoin and other alternative assets. This policy triggered discussions in late August about launching new Bitcoin investment products. Given that 401(k) plans manage about USD 8.9 trillion in assets, even a modest 1% allocation to Bitcoin would imply nearly USD 89 billion in potential inflows.
On-Chain Metrics Signal Caution Amid Resilience
On-chain data at the end of August indicated short-term overheating but overall resilience. The MVRV-Z score stood at around 2.49, above its historical average and suggesting potential near-term correction risks. However, the aSOPR was around 1.019 and NUPL at 0.558, both reflecting stable realized and unrealized profit levels. This indicates that while current prices sit above average cost, the market as a whole has not entered excessive profit-taking territory.
Upcoming Data and Policy to Guide Market Expectations
Macro data releases are also likely to influence sentiment. Preliminary estimates from the U.S. Department of Commerce showed second-quarter real GDP grew at an annualized rate of 3.0%, rebounding sharply from -0.5% in the first quarter, driven by a 30.3% collapse in imports, stronger consumer spending, and increased government outlays. Markets expect the revised figure due on August 28 to be lowered to around 3.0% or even 2.4%. A downward revision would reinforce expectations of monetary easing. On August 29, the July Personal Consumption Expenditures (PCE) report—considered the Fed’s preferred inflation gauge and the last major release before the September FOMC meeting—will be published. Economists expect core PCE (excluding food and energy) to edge up from 2.8% to 2.9% year-on-year, with a 0.3% monthly increase, while headline PCE is expected to remain around 2.6% year-on-year, with a 0.2% monthly increase. If the data overshoots, markets may reassess the timing of Fed rate cuts; if it comes in weaker, it would provide further support for Bitcoin.
*The above content is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.
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