Bitcoin Braces for Fed Shock as Trump Calls for Rate Cuts

Bitcoin and the broader crypto market are on edge as traders brace for the Federal Reserve’s latest interest rate decision. Following a volatile start to the week, the price of Bitcoin saw a sharp drop toward $100,000 before rebounding to around $102,000. However, market sentiment remains cautious amid fears of a “financial crisis.”

Trump’s Rate Cut Demand Adds to Uncertainty

Former U.S. President Donald Trump has openly called for the Fed to lower interest rates “by a lot,” adding pressure on Federal Reserve Chair Jerome Powell. Trump has previously argued that U.S. presidents should have a say in monetary policy decisions, raising concerns about the Fed’s independence.

The market is currently pricing in a near-100% certainty that the Fed will hold rates steady, following three consecutive rate cuts. However, Powell’s remarks at the upcoming press conference could influence Bitcoin’s trajectory. Analysts suggest that any hint of further rate cuts could fuel a crypto rally, while a hawkish stance could lead to further losses.

Bitcoin vs. Gold: The Battle for Market Dominance

Coinbase CEO recently projected that Bitcoin could eventually surpass gold’s $18 trillion market cap, solidifying its role as “digital gold.” While Bitcoin’s supply remains fixed at 21 million coins, macroeconomic factors such as interest rate policies and inflation expectations continue to drive its price action.

What’s Next for Bitcoin?

Alex Kuptsikevich, FxPro’s chief market analyst, attributes Bitcoin’s current lull to risk aversion ahead of the Fed meeting. The decision, expected at 2 PM ET on Wednesday, will be closely scrutinized for signals on future monetary policy.

If Powell signals a dovish shift or hints at more rate cuts, Bitcoin could see renewed bullish momentum. Conversely, if the Fed emphasizes maintaining higher rates to control inflation, Bitcoin might struggle to regain upward momentum in the short term.

Final Thoughts

The intersection of politics and monetary policy has placed Bitcoin in a highly volatile position. As traders await the Fed’s decision, crypto markets remain on high alert. Whether Bitcoin surges past $110,000 or dips below $100,000 could hinge on Powell’s tone and market reaction to Trump’s latest remarks. One thing is certain—crypto investors should prepare for heightened volatility in the coming days.

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