Bitcoin Braces for Fed Balance-Sheet Shift as Liquidity Cycle Turns

The Federal Reserve's decision to end its quantitative tightening program signifies a critical moment for Bitcoin, as analysts speculate whether this change will reignite its bull run or mimic 2019's downturn. While the Fed's shift is generally bullish for risk assets like Bitcoin, it may accompany initial volatility. Current market conditions differ from 2019, as interest rates are higher, and institutional demand is stronger. Rajiv Sehgal, an analyst at Delta Exchange, mentions caution as Bitcoin funds have seen significant outflows. Experts note the parallels with 2019, such as trade tensions and political pressures, but emphasize that Bitcoin now sits at the center of global liquidity flows. Sean Dawson from Derive highlights that today's higher interest rates may lead to an influx of capital into Bitcoin if rates drop. Although short-term volatility may lead to a correction, the long-term outlook is optimistic, predicting Bitcoin could reach $200,000 by late 2026, especially if macroeconomic conditions remain favorable.

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