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Experts Predict Bitcoin’s Future Hinges on Federal Reserve’s Next Move: Crash Like 2022 or New Highs?

2 mins
Updated by Ali M.
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In Brief

  • Experts are speculating on the potential impact of monetary policy changes by the Federal Reserve on the crypto market, specifically on the price of Bitcoin.
  • Inflation, as measured by the Consumer Price Index (CPI), has peaked at 9% in mid-2022 and is now decreasing towards the target 2% level, which may signal a shift in policy.
  • BTC price is heavily dependent on the future path of USD global liquidity due to the dollar's role as the global reserve currency.
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Bitcoin, the digital currency known for its volatility and decentralized nature, is once again making headlines.

Given BTC’s recent price action, financial experts, like former CEO of BitMEX Arthur Hayes, are now speculating on the potential impact of monetary policy changes by the Federal Reserve on the crypto market.

Will Bitcoin Start a New Bull Run?

Recent data from the US Bureau of Labor Statistics has shown that inflation, as measured by the Consumer Price Index (CPI), has peaked at 9% in mid-2022 and is now decreasing towards the target 2% level. Some experts believe that this trend may signal a shift in policy by Federal Reserve Chairman Jerome Powell, potentially moving away from Quantitative Tightening (QT) in response to the threat of a recession.

Source: U.S. Bureau of Labor Statistics

But what does this mean for Bitcoin? Many argue that the crypto market, specifically Bitcoin, operates independently of manipulation by central banks and large financial institutions. Furthermore, the price of Bitcoin is heavily dependent on the future path of USD global liquidity due to the dollar’s role as the global reserve currency.

Recent performance in the market suggests that investors are anticipating a pivot in Federal Reserve policy. Some experts predict that if the Fed does follow through with a policy shift, it could continue to drive the current rally in Bitcoin and potentially start a “secular bull market.”

Source: BeInCrypto

Still, if the Fed does not follow through or talks down any expectation of a pivot, Bitcoin’s price could potentially crash back down towards previous lows.

It’s important to note that, like any market, the crypto market is subject to fluctuations and corrections. Some have pointed to the failure of companies like Three Arrows Capital, FTX, Genesis, and Celsius as evidence of this. However, others argue that these failures were a natural part of the market correcting itself and purging itself of poorly run businesses with flawed business models, ultimately leading to a swift and healthy rebound.

As the world continues to watch the future of monetary policy and its potential impact on the crypto market, one thing is clear: the world of Bitcoin and digital currencies is rapidly evolving, and the potential for both volatility and growth remains high.

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Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

This article was initially compiled by an advanced AI, engineered to extract, analyze, and organize information from a broad array of sources. It operates devoid of personal beliefs, emotions, or biases, providing data-centric content. To ensure its relevance, accuracy, and adherence to BeInCrypto’s editorial standards, a human editor meticulously reviewed, edited, and approved the article for publication.

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Ali Martinez has been at the forefront of content creation and market analysis in the cryptocurrency industry since its early days. His journey began with reporting on market trends and price movements, and he quickly established himself as an authority in the field. Ali has covered significant developments in the cryptocurrency market, including market booms, regulatory changes, and major technological advancements. His deep understanding of blockchain technology and market trends has...
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