New Bitcoin Price Prediction Based on Possible Federal Reserve Change
The Federal Reserve is about to make a decision interest rates, but it could also make a decision about cryptocurrency in the near future that could drastically impact Bitcoin (BTC).
The wider crypto market is certain to feel the change if the Federal Reserve ends its quantitative tightening program in May. There is some indication that this could happen, with crypto prediction platform Polymarket anticipating a high probability of that occurring.
This policy permits the central bank to sell bonds that reduce the supply of cash floating around in order to keep inflation low and keep the economy in a safe place. If this policy winds down, as many expect it to, that could drastically increase the value of cryptocurrency tokens like Bitcoin. Because these digital funds get a large part of their value from their limited supply, they could become more valuable if the U.S. government takes its hands off the fiat currency supply.
Bitcoin’s Performance and Our Prediction
Bitcoin is down 0.95% today to $82,273 (BTC/USD), and it has gained slightly over the last week. Tariff concerns and sticky inflation are keeping Bitcoin low, as both of these factors limit how much money people have available to risk on cryptocurrency.
Discretionary spending has been tight this year, with January marked as a month of high consumer prices and tight inflation. February was a bit better, but the economy is still in a rough spot, and the stock market is also being hit hard by new tariff policies that have kept the stock indices negative for four weeks. All of this hurts cryptocurrency tokens like Bitcoin and makes investors wary of putting their money into decentralized finance.
What may happen, though, if the Federal Reserve decides to decrease their quantitative tightening (QT), is that Bitcoin and other crypto tokens could shoot up. This may happen near the end of April in anticipation of the end of QT. That could bring Bitcoin back over the $100K mark in a big way. While it is still unlikely that the coin will hit $150K this year, it is the potential for QT ending that holds the most promise right now that Bitcoin will skyrocket.
Investors are also hoping that President Donald Trump will improve the regulatory framework surrounding cryptocurrency. If that happens this year, it could mean that there will be fewer crypto restrictions, and it will become easier to trade Bitcoin.
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