A major potential shift in U.S. monetary policy could lead Bitcoin‘s price to reach $250,000 by the end of this year. According to Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX and a prominent economist, Bitcoin’s valuation is closely tied to market predictions about the future availability of dollars. Recent comments from Federal Reserve Chairman Jerome Powell hinting at a shift away from tightening monetary conditions have sparked optimism among Bitcoin supporters.
How Will Powell’s Decisions Impact Bitcoin?
Hayes believes growing political pressures will compel Powell to slow down the current monetary tightening. Powell’s recent indications of possibly reversing the pace of balance sheet reduction and restarting bond purchases have boosted expectations for a transition to more accommodative monetary policies. Such changes could trigger a rapid increase in Bitcoin’s value.
What Role Will Treasury Policies Play?
Hayes also pointed out that U.S. Treasury Secretary Scott Bessent’s initiatives to ease restrictions on bank acquisitions of Treasury bonds could further benefit Bitcoin. By improving banks’ ability to invest in bonds, Bessent aims to enhance government borrowing capabilities. These combined efforts from the Fed and financial institutions could significantly elevate Bitcoin’s price through an increased dollar supply in the market.
The expectations about future fiat money supply are crucial to Bitcoin’s valuation. As the Fed shifts back to easier monetary policies, it creates a favorable atmosphere for investors in Bitcoin. Hayes noted that as long as Bitcoin’s technological base remains stable, its pricing will remain influenced by monetary supply expectations.
- Increased public spending and government borrowing are anticipated due to policies from the previous administration.
- The Fed may be compelled to augment the money supply to manage growing debt levels.
- Hayes projects Bitcoin could reach $250,000 by year-end given these circumstances.
Currently, Bitcoin is experiencing a rebound after dipping to approximately $78,000, fueled by expectations of a shift in the Fed’s monetary policy. Leading figures like Hayes assert that Powell is likely to ease monetary conditions under increasing pressure, which could not only elevate Bitcoin but also positively impact altcoins in the market.
