Bitcoin Braces for Fed Balance-Sheet Shift as Liquidity Cycle Turns
The Federal Reserve's recent decision to end its quantitative tightening program places Bitcoin at a pivotal liquidity juncture, raising the question of whether this will ignite another bull run or result in a repeat of the 2019 policy slump. Analysts highlight that, despite potential short-term volatility, the crypto landscape has shifted significantly since 2019. Higher interest rates, now around 4%, and institutional demand could amplify positive outcomes for Bitcoin as capital flows begin. Historical trends suggest that such transitions often mean increased investments in risk assets. Although some traders remain cautious amid market corrections and outflows from Bitcoin and Ethereum funds, others believe the current macro and geopolitical factors favor a bullish outlook for Bitcoin, with projections suggesting it could reach $200,000 by Q3 2026 if the easing cycle continues. Experts advocate that while short-term dips may occur, the broader easing cycle will set a favorable tone for risk assets, indicating strong long-term potential for Bitcoin holders.
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